After increasing a healthy 8.9% the previous month, new home sales in October reached an annual rate of about 685,000, an increase of 6.2% compared with about 645,000 in September and an increase of 18.7% compared with about 577,000 in October 2016, according to estimates released by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.
The median sales price for a new home sold in October was $312,800. The average sales price was $400,200.
As of the end of October, there were about 282,000 new homes available for sale nationwide – about a 4.9-month supply at the current sales rate.
The news is no doubt welcome in the housing and mortgage industries, where a lack of supply has been holding back home sales for over a year. In a statement, Bill Banfield, executive vice president for Quicken Loans, points out that October’s tally is more than 100,000 units above the level seen in November 2016.
“Especially given the increase in the number of properties sold in which construction hadn’t yet started, we should feel confident that residential building will accelerate in coming months,” Banfield says. “That said, the high average selling prices pose a hurdle for younger home buyers entering the market for the first time. A stable job market and sustained low mortgage interest rates continue to increase property prices.”
New home sales in October were strongest in the Northeast, where they increased 30.2%. Sales were up 17.9% in the Midwest; 6.4% in the West and 1.3% in the South.