Over the last few months, new home sales have stemmed the tide that saw sales decline in April, May, and June. But the modest increase seen in July and August’s continued improvement don’t hold a candle to what happened in September.
According to new data from the Census Bureau and the Department of Housing and Urban Development, sales of newly built, single-family homes in September jumped by a whopping 14% over August to the highest point in six months.
Per the report, the pace of new home sales hasn’t been this strong since March.
However, it should be noted that new home sales in September were still running behind last year’s pace by 17.6%.
The increase in sales seen in September was driven by “strong demand, low existing inventory, and buyers’ anticipation of future higher mortgage rates,” according to the National Association of Home Builders.
“Limited existing inventory and low interest rates are keeping demand strong, and more potential buyers may be coming off the fence as they expect interest rates to rise in the future,” NAHB Chairman Chuck Fowkes said.
The increased demand for new homes is helping to drive prices up, with the median sales price for new home climbing from $401,500 in August to $408,800 in September.
“Solid demand and ongoing building material supply bottlenecks continue to put upward pressure on new home prices,” NAHB Senior Economist Jing Fu said. “Median new home sale prices are up 18.7% on a year-over-year basis. At the same time, only 21% of current sales are below $300,000, compared to a 35% pace a year ago.”