October New Home Sales Pace Hits Two-Year Low
With housing affordability squandering buyer interest, the U.S. Department of Housing and Urban Development and the U.S. Census Bureau saw new single-family home sales take a seasonal dive in October. Sales were up nearly 3% from December 2017; however, the National Association of Home Builders (NAHB) reported the seasonally adjusted annual rate dropped to 544,000 units, falling further from September's rate of 553,000 units.
Economists continued to point toward affordability as the cause behind weakened new single-family home sales, as interest rates and home prices rise. NAHB states buyers are instead eyeing townhomes and "lower-cost homes," while the median sales price of single-family homes fell 3.6% to $309,700.
"Policymakers should see this drop in sales as an indicator that housing affordability will continue to slow down the market," Randy Noel, chairman of NAHB and a custom home builder from LaPlace, Louisiana, said in an article.
NAHB noted the dip was linked to a 17.1% decline in home sales in the Northeast, despite gains in the Midwest (6.3%), West (4.1%) and South (3.8%). In a statement, NAHB Senior Economist Danushka Nanayakkara-Skillington said it was "critical" for policymakers to address the affordability issues if they wish to see any changes in the market.
—Andrew Michaels, editorial associate