New Home Sales Increase to 738,000 Annual Rate in September

Median New Home Price is Down 7% from the Peak due to Change in Mix

The Census Bureau reported New Home Sales in September were at a seasonally adjusted annual rate (SAAR) of 738 thousand. The previous three months were revised down.

Sales of new single-family houses in September 2024 were at a seasonally adjusted annual rate of 738,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 4.1 percent above the revised August rate of 709,000 and is 6.3 percent above the September 2023 estimate of 694,000.
emphasis added

The first graph shows New Home Sales vs. recessions since 1963. The dashed line is the current sales rate.

New home sales were slightly above pre-pandemic levels. The second graph shows New Home Months of Supply.

The months of supply decreased in September to 7.6 months from 7.9 months in August. The all-time record high was 12.2 months of supply in January 2009. The all-time record low was 3.3 months in August 2020. This is above the top of the normal range (about 4 to 6 months of supply is normal).

"The seasonally-adjusted estimate of new houses for sale at the end of September was 470,000. This represents a supply of 7.6 months at the current sales rate."

On inventory, according to the Census Bureau:

"A house is considered for sale when a permit to build has been issued in permit-issuing places or work has begun on the footings or foundation in nonpermit areas and a sales contract has not been signed nor a deposit accepted."

Starting in 1973 the Census Bureau broke this down into three categories: Not Started, Under Construction, and Completed. The third graph shows the three categories of inventory starting in 1973.

The inventory of completed homes for sale (red) - at 108 thousand - is more than triple the record low of 31 thousand in February 2022. This is the most since 2009, but still close to the normal level of completed homes for sale.

The inventory of homes under construction (blue) at 258 thousand is very high but is about 19% below the cycle peak in July 2022. The inventory of homes not started is at 104 thousand - this is the all-time high.

The fourth graph shows new home sales for each month, Not Seasonally Adjusted (NSA), for a few selected periods. Black is the maximum sales per month during the bubble (2005) and light gray is the minimum sales during the bust (2008 - 2011). The most recent six years are shown (2019 through 2024).

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