New-home sales unexpectedly jump to highest level since 2007
Purchases of new homes unexpectedly surged in September to the highest level in a decade as activity accelerated in the South after Hurricanes Harvey and Irma, according to government data Wednesday.
Single-family home sales rose 18.9% month-to-month to a 667,000 annualized pace (the estimate was 554,000), the strongest since October 2007. Purchases in the South surged 25.8% month-to-month to a 405,000 rate, the fastest since July 2007. Sales in other regions also advanced.
The median sales price increased 1.6% year-to-year to $319,700. The supply of homes at the current sales rate dropped to five months from six months; 279,000 new houses were on market at the end of September.
The biggest monthly gain in home sales since January 1992 reflected an increase in the number of properties in which construction hadn't yet started. That level of 236,000 was the most since January 2007 and signals residential building will strengthen in coming months as firms get busy filling orders.
While the report showed particular strength in the South, possibly a reflection of increased demand following the storms, sales were firm in other parts of the country. A steady job market and low mortgage costs will help keep the housing recovery on track.
New-home sales, tabulated when contracts get signed, account for about 10% of the market. They're considered a timelier barometer than purchases of previously owned homes, which are calculated when contracts close and are reported by the National Association of Realtors. The figures are volatile on a month-to-month basis.
Purchases in the Midwest climbed 10.6% in September and were up 2.9% in the West. The Commerce Department said there was 90% confidence that the change in sales last month ranged from a 0.1% drop to a 37.9% increase, underscoring the volatility of the data. The report was released jointly by the Census Bureau and Department of Housing and Urban Development in Washington.