Sales of new homes hit 10-year high

Sales of new homes hit a 10-year high in September, bouncing back after a few slow months.

New home sales surged 18.9 percent to a seasonally adjusted annual rate of 667,000 units from 561,000 in August, the highest sales rate since October 2007, a couple of months before the recession started, the Department of Commerce reported on Wednesday.

{mosads}”New home sales have bounced back from a few soft months and have returned to the strong growth trend we saw earlier this year,” said Robert Dietz, chief economist for the National Association of Home Builders (NAHB).

“As existing home inventory remains tight, we can expect new homes sales to continue to make gains in the months ahead,” Dietz said.

The inventory of new homes for sale was 279,000 in September, which is a five-month supply at the current sales pace.

So far this year, new home sales are 8.6 percent above the same period last year.

“The September sales numbers show that there is solid, growing demand for new home construction,” said Granger MacDonald, chairman of the NAHB and a home builder and developer from Kerrville, Texas.

“However, builders need to continue to monitor rising construction costs to keep houses affordably priced,” Granger said.

The median sales price of new houses sold in September was $319,700. The average sales price was $385,200.

Regionally, new home sales increased across all four regions. Sales rose 33.3 percent in the Northeast, 25.8 percent in the South, 10.6 percent in the Midwest and 2.9 percent in the West.

Still, economists urged caution in analyzing the data. 

“On a cautionary note, however, the new home sales figures are often revised sharply and have a large standard error, so today’s surprising gain needs to be taken with a larger-than-usual grain of salt,” said Nationwide chief economist David Berson.