New-Home Sales Rise 2.7 Percent In September
|October 27, 2008|
Sales of newly built single-family homes turned upward in September, posting a 2.7 percent gain to a seasonally adjusted annual rate of 464,000 units, according to U.S. Commerce Department numbers released today. The report also indicated that builders are making substantial progress in winnowing down the months’ supply of unsold units on the market.
“It’s great to see some upward movement in new-home sales, particularly in light of the strong efforts that home builders have been making to bring supply and demand back into balance by limiting new construction and offering substantial price- and non-price incentives on already-built units,” said NAHB Chairman Sandy Dunn, a home builder from Point Pleasant, W.Va. “Of course, it’s too soon to say the market has stabilized, and we still have a very difficult road ahead that will require additional government action to speed the recovery of housing and the national economy.”
“Keeping things in perspective, today’s gain in new-home sales followed a downward revision for August and was almost entirely concentrated in the West region, where sales bounced back from a very low level in August,” noted NAHB Chief Economist David Seiders. “The fact is that housing demand remains fundamentally weak and the housing contraction continues to weigh heavily on the financial markets and the overall economy. Without question, an additional economic stimulus package – including substantial measures to spur home buying and limit foreclosures – is necessary to support home prices, stabilize financial markets and limit the severity of recession.”
The number of new homes for sale shrank to 394,000 units in September, down from 425,000 units in August. At the current sales pace, there was a 10.4 months’ supply of unsold new units on the market, versus an 11.4 months’ supply in August. Meanwhile, the median number of months that completed new homes have been on the market moved up to 9.1 – a new record.
Regionally, sales activity gained 22.7 percent in the West and 0.7 percent in the South in September, but at the same time declined 21.4 percent in the Northeast and 5.8 percent in the Midwest.