Data from the Department of Commerce released on Oct. 26 shows new home sales were at 950,000 units in September, 3.5 percent lower than predictions. Sales also took a hit in August as the report was revised to show roughly 900,000 units, a significant drop from the previously reported 1.1 million units.
This has come as a major surprise to economists who predicted that new home sales would increase by 2.4 percent.
“We expect the pace of sales to moderate further in the fourth quarter,” said Nancy Vaden Houten, Lead U.S. economist at Oxford Economics. “Strong demand and low mortgage rates are supportive of home sales, the resurgence in Covid-19 cases, a recovery that may be shifting into reverse and a weak labor market pose downside risks.”
The median sales price of new houses sold in September was $326,800, up from $322,400 in August, a 3.5 percent increase from the previous year.
Sales of new homes in the Northeast plunged by nearly 29 percent to 32,000 units. The Midwest and South saw slumps of 4.1 percent and 4.7 percent, respectively. The West was the only region to see a boost in the sale of new homes to the tune of nearly four percent.
Meanwhile, residential real estate sectors have seen a nine percent boost overall.
The most significant gains earlier were seen in the Northeast, which CNBC reports had a median home price of $354,600, a jump of 17 percent from the past year.
After the Northeast, the West followed with an increase of nine percent in sales and a median home price at $470,800, a jump of 17 percent from the past year. The South saw an eight percent increase in sales with median home prices at $226,900, 13 percent more than the past year. The Midwest saw a seven percent increase in sales, with the median home price resting at $243,000, a 15 percent increase from the past year.