The national housing market came in slightly overperforming for the ninth month in a row in September, according to Zonda’s latest New Home Market Update report.
Accounting for both cancellations and seasonality, Zonda's new-home sales metric shows there were 715,673 new homes sold in September on a seasonally adjusted annualized rate. This was a gain of 0.3% from last month and an increase of 7.5% from a year ago. On a non-seasonally adjusted basis, 56,946 homes were sold, 9.2% higher than last year and 8% above the same month in 2019.
"Lower mortgage interest rates were the housing story in September, but they have since trended up," says Ali Wolf, Zonda's chief economist. "It is important to remember what drives mortgage interest rates. Federal Reserve policy can help guide mortgage rates directionally, but investors impact day-to-day action. The recent volatility, however, does not change our thesis that mortgage rates are more likely to be down than up in 2025."
Zonda's New Home Pending Sales Index (PSI) came in at 147.2, representing a 7.3% rise from the same month last year. The index is currently 15.5% below cycle highs. On a month-over-month basis, seasonally adjusted new-home sales increased 3.4%.
The markets that posted the best numbers relative to last year were Phoenix (+31.7%), Seattle (+26.3%), and Washington, D.C. (+19.4%). On a monthly basis, Salt Lake City, Seattle, and Baltimore were the best performing markets. Salt Lake City increased 22.2% relative to last month.
Inversely, the metros that performed the worst year over year were San Francisco (-23.7%), Atlanta (-14.6%), and Tampa (-11.2%).
To add further context on the metro level, the Zonda Market Ranking (ZMR) was created. The national ZMR came in at 118.4 in September, indicating a slightly overperforming market, ranking in line with last month and this time last year.
Zonda's snapshot markets were split between 60% overperforming, 30% average, and 10% underperforming in September. Among Zonda's top 50 major markets, 66% were overperforming, 20% were average, and 14% were underperforming.
According to Zonda, national home prices decreased year over year across entry-level, move-up, and high-end homes. Prices fell 3.2% for entry-level to $329,772, 2.8% for move-up to $518,471, and 1.6% for high-end homes to $912,877.
Supplementing with a monthly builder survey data, 16% of builders lowered prices in September, 63% held prices flat, and 21% raised prices. In August, for comparison, 15% of builders lowered prices, 65% held prices flat, and 20% increased prices.
Incentives are still common in today's housing market. Fifty-eight percent of new-home communities offered incentives in September, the same percentage as last month. Zonda's builder survey captured that most builders are offering mortgage rate buydowns, with 60% of builders reporting they are willing and able to offer a buydown between the low-4%s and the low-5%s.
Currently, there are 15,160 actively selling communities tracked by Zonda, up 6.6% from last year. On a month-over-month basis, the national figure grew 0.1%. Total community count is 21.3% below the same month in 2019.
Dallas (+15.2%), Baltimore (+15.1%), and Atlanta (+8.9%) grew community count the most year over year. Community count fell the most in Los Angeles/OC (-19%), San Francisco (-18%), and Philadelphia (-15.4%) relative to last year.
National quick move-ins (QMIs) totaled 31,703, up 9.5% compared to last year but 3.4% lower month over month. Total QMIs are 38.1% above 2019 levels.
On a metro basis, 60% of Zonda's select markets increased QMI count year over year. The markets that grew the most year over year were Charlotte (+60.9%), Cincinnati (+50.8%), and Philadelphia (+37.1%). Cincinnati, Las Vegas, and Salt Lake City have seen the most growth in QMIs compared to the same time in 2019, up 229.7%, 202.6%, and 164.8%, respectively.
