May 26, 2018

Pace of New-Home Sales Levels Off

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Pace of New-Home Sales Levels Off

Sales of new single-family homes dropped slightly by 0.3 percent from September to October, but were still 17.2 percent higher than the same time last year, the Commerce Department reported Wednesday.

Despite the slight decrease, “new home sales and the housing market in general are on the right path,” says Yelena Shulyatyeva, an economist with BNP Paribas in New York. “It’s just that progress will be slow.” 

David Crowe, chief economist at the National Association of Home Builders, notes that the pace of new-home sales activity leveled off over the four months from July to October, after steady improvement in home sales for most of the year. 

"The latest numbers are right in line with our forecast, which projects that sales will resume a slow, upward trajectory going forward and will end 2012 about 20 percent ahead of 2011,” Crowe says.

Broken down by region, new-home sales were mixed in October. In the Midwest, new-home sales rose 62.2 percent last month, but that followed a big drop the previous month. In the West, new-home sales increased 8.8 percent in October. However, the Northeast saw a 32.3 percent drop in new-home sales and the South saw an 11.6 percent drop. 

The median sales price for new homes in October was $237,700 — 5.7 percent higher compared to a year ago. 

Source: National Association of Home Builders and “New Home Sales Slip, Casting Shadow Over Housing Recovery,” Reuters (Nov. 28, 2012)