A house is under construction in Oakland, California. Photographer: David Paul Morris / Bloomberg
David Paul Morris / Bloomberg
New US home sales rose slightly in October, reflecting stabilization in demand, despite home builders facing supply chain disruptions and buyers grappling with rising prices.
New single-family home purchases rose 0.4% to an annualized pace of 745,000 after being revised downward in September, government data showed on Wednesday. The median estimate in a Bloomberg poll of economists called for a rate of 800,000.
The report, produced by the US Census Bureau and the Department of Housing and Urban Development, showed that the average sales price of a new home rose 18% year over year to a record $ 407,700.
Sentiment among US home builders has held up as a lack of options in the resale market, combined with low mortgage rates and a desire for more spacious homes, fuel demand for new homes among Americans who work remotely. Still, transportation bottlenecks, increased material costs and labor shortages have disrupted the pace of housing construction, delaying completion and pushing prices out of reach for many potential buyers.
At the end of October, 389,000 new homes were up for sale, most for 13 years – although 28% of those homes hadn't started yet. At the current rate of sales, it would take 6.3 months to exhaust the supply of new apartments, compared to 3.6 months at the beginning of the year.
The number of houses sold in October awaiting construction – a measure of the backlog – rose to 271,000 from a month earlier, Wednesday's report showed. The total number of homes sold during construction fell to 291,000, the lowest since June 2020.
Separate data released earlier this week showed that condominium purchases, which make up most of the market, rose to their highest year-to-date level last month due to strong underlying demand.
The purchase of new homes accounts for around 10% of the market and is calculated when the contract is signed. They are considered a more up-to-date barometer than the purchase of condominiums, which are calculated when the contract is signed.
The data on new homes is volatile; The report showed a 90 percent confidence that the change in sales ranged from a decrease of 20.7% to an increase of 21.5%.