US New-Home Sales Spikes 6.2% to 10 year Highs
Americans bought new homes in October at the fastest pace in a decades, a 6.2% monthly increase that reflects both the underlying strength of the economy and a shortage of existing homes for sale.
The Commerce Department said Monday that new-home sales last month rose to a seasonally adjusted annual rate of 685,000.
That marks the 3rd monthly gainer running, and the best sales since October 2007. Much of the sales growth came from the Northeast and Midwest, with the South and West posting smaller increases.
Many buyers are turning to new construction because there is a shrinking supply of existing homes for sale.
New construction has been unable to keep up with demand.
Potential buyers are searching for homes amid a healthy job market with a 4.1% unemployment rate and attractive 30-year mortgage rates that are averaging less than 4%.
The average sales price of a new home rose 13.6% over the past 12 months to $400,200.
The number of sales listings for existing homes has tumbled 10.4% from a year earlier to just 1.8-M, according to the National Association of Realtors (NAR). That is the fewest number of homes on the market for any October since the Realtors began tracking the data in Y 1999.
New construction can only offset some of this supply crunch.
There is just 4.9 months’ supply of newly-built homes on the market, the lowest reading since July 2016.