New single-family home sales rose in October, increasing 7.5 percent to 632,000 homes at a seasonally adjusted annual rate, up from the 588,000 pace in September. The October gain was the third increase in the past eleven months, resulting in sales down 5.8 percent from a year ago and down 39.0 percent from the post-recession peak in August 2020. October sales remain below the 50-year median sales price year (see first chart).
In October, new single-family home sales rose in two of the four regions. Sales in the Northeast, the smallest region by volume, increased 45.7 percent, and sales in the South, the largest by volume, increased 16.0 percent. However, sales in the Midwest fell 34.2 percent in the month, while sales in the West fell 0.8 percent.
Over the past 12 months, sales declined in three of the four regions, led by a 26.5 percent drop in the Midwest, followed by a 22.8 percent drop in the West, and a 0.3 percent drop in the South. The Northeast region shows an increase of 59.4 percent from October 2021.
The median sale price of a new single-family home was $493,000 (see chart two), up from $455,700 in September (not seasonally adjusted), which put the 12-month median price at a record high of $445,000 (see chart). second chart). Meanwhile, 30-year fixed-rate mortgages were at 6.61 percent in late November, down from 7.08 percent in mid-November, but have risen sharply from a low of 2.65 percent in January 2021. A combination of higher rates and foreclosure rates A high mortgage reduces affordability and pressure. buyers outside the market.
Total inventory of new single-family homes for sale rose 1.5 percent to 470,000 in October, the highest level since February 2008. That puts months supply (inventory count 12 divided by annual sale rate) at 8.9, down 5.3 percent from September. But 29.0 percent above last year’s level. Inventory and months supply remain very high by historical comparison (see chart three). The high level of prices, rising inventory, and rising mortgage rates should continue to weigh on housing activity in the coming months and quarters. However, the average time on the market for a new home remained very low in October, coming in at 1.6 months versus 1.5 in September.
Meanwhile, the National Association of Home Builders’ Housing Market Index, a measure of sentiment for homebuilders, fell again in November, registering 33 versus 38 in October. This is the eleventh consecutive decline and the fourth consecutive month below the neutral 50 threshold. The index is down sharply from its recent highs of 84 in December 2021 and 90 in November 2020 (see chart four).
The three components of the housing market index fell again in November. The expected single-family sales index fell to 31 from 35 in the previous month, the current single-family sales index fell to 39 from 45 in October, and the potential buyers movement index fell again, reaching 20 from 25 in the previous month. month (see the fourth chart).