Millennials boosted sales of new homes last month

by Steve Randall27 Nov 2019

Sales of newly-built single-family homes were slightly lower in October following an upwardly revised strong September reading.

Figures from the HUD and Commerce Dept. show that sales declined 0.7% to a seasonally adjusted annual rate of 733,000 units.

Year-to-date sales are up 9.6% from 2018 and the past two months represent the highest monthly sales rate since October 2007. On this basis, new home sales are up 15.7% in the South and 9.1% in the West. Sales are down 11.1% in the Northeast and 7.5% in the Midwest.

“Forty-five percent of homes sold in October were priced below $300,000, which is an indication that more millennial buyers are taking advantage of low mortgage rates and entering into the marketplace,” said Greg Ugalde, chairman of the National Association of Home Builders.

The median sales price was $316,700, down from $328,300 a year earlier.

New home inventory is below 6-months of supply, falling short of a balanced market. The 322,000 available homes would last 5.3 months at the current sales pace.

“For-sale inventory remains tight as this marks the third consecutive month below a six-month supply,” said Danushka Nanayakkara-Skillington, NAHB’s Assistant Vice President of Forecasting and Analysis. “The low inventory rates show there is a need for added construction to meet growing demand.”

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