Sales of new single-family homes in October moderated month over month, declining 5.6% to a seasonally adjusted annual rate of 679,000, according to estimates by the U.S. Census Bureau and Department of Housing and Urban Development.
“The October inflection point was captured in the latest new-home sales report. New-home sales pulled back in October following higher rates and faltering consumer confidence,” says Zonda chief economist Ali Wolf. “Since then, we have seen mortgage rates come down from the recent peak, but holiday distractions and affordability challenges remain a headwind through the end of the year.”
The estimate for new-home sales in October represented a 17.7% increase above the October 2022 estimate of 577,000.
“Even with the decline in October, new-home sales remained resilient compared to the pace of existing-home sales. New sales were up 17.7% from a year ago, while existing sales recently hit the slowest pace since 2010,” says Fannie Mae chief economist Doug Duncan. “Home builders continue to move toward more modestly priced products and are able to offer concessions to drive sales in [the] face of high mortgage rates.”
According to October data, the median sales price of new homes sold during the month was $409,300. The average sales price was $487,000. According to NerdWallet home expert Holden Lewis, 32% of new homes sold in October cost $500,000 or more, compared with 49% in October 2022.
“The median new-home sale price in October 2023 was 18% below the October 2022 median price, which, coincidentally, was also the cycle high at $496,800,” says Duncan. “We expect new-home sales to soften further over the remainder of the year, but with mortgage rates recently pulling back somewhat, we don’t expect the decline to be large.”
The seasonally adjusted estimate of new houses for sale at the end of October was 439,000, which represents a supply of 7.8 months at the current sales rate.
