New home sales fall slightly in October

The number of new home sales in the U.S. fell slightly last month, but they remain almost 10% higher than they were this time last year, according to data released by the Commerce Department this week.

In addition, the last two months in new home sales represent the highest monthly sales rate since October 2007, the Commerce Department said.

Overall, sales of newly built single-family homes came to an adjusted annual rate of 733,000 units in October, down 0.7% compared to the previous month.

“For-sale inventory remains tight as this marks the third consecutive month below a six-month supply,” said Danushka Nanayakkara-Skillington, assistant vice president of forecasting and analysis at the National Association of Home Builders, in a statement. “The low inventory rates show there is a need for added construction to meet growing demand.”

Available inventory of new homes for sale stood at 322,000 in October, which is around a 5.3 month supply at the current sales pace. The median sales price in October came to $316,700, down from a median sales price of $328,300 in October 2018.

“Buyers are facing not enough choices,” Lawrence Yun, chief economist of the National Association of Realtors, said in a statement. “Therefore, prices are getting bid up, especially in the starter home market and in the mountain states.”

On a regional basis, the South saw new home sales rise 15.7% year-over-year, while the West saw gains of 9.1%. However the Northeast saw a decline in new home sales of 11.1%, while the Midwest fell by 7.5% compared to one year ago.