New-home sales in the US experienced a more robust increase than anticipated last month, with median home prices rising both sequentially and annually, according to government data released on Thursday. Sales of single-family homes increased by 4.1% on a monthly basis, reaching a seasonally adjusted annual rate of 738,000 units, an improvement from the downwardly revised figure of 709,000 for August, as reported by the Census Bureau and the Department of Housing and Urban Development. Analysts had projected sales to settle around the 720,000 mark, which would have represented a modest 0.6% growth from the unrevised figure, based on a survey conducted by Bloomberg.
When comparing annual numbers, new-home sales reflected a notable increase of 6.3%. The economic climate did not appear to sway sales figures in the South, despite the arrival of Hurricane Helene, stated Bernard Yaros, lead US economist at Oxford Economics, in a note. The performance of new-home sales exceeded projections in the third quarter, implying a potential revision upward for Oxford's baseline sales forecast concerning newly constructed homes, as observed by Yaros. Hurricane Helene made landfall in Florida towards the end of September. Sales activity saw an upswing in both the Northeast and South in September, while remaining flat in the West and declining in the Midwest, according to the government statistics.
Compared to September 2022, there was a double-digit decrease in sales in the Northeast and West, contrasted by increases in the Midwest and South. The median price for new houses sold surged to $426,300 last month, up from August's $410,900, and slightly above the $426,100 recorded in September 2022, per the data. Moreover, the new home supply saw a reduction to 7.6 months at the current sales rate in September, down from August's 7.9-month supply, as reported by the Census Bureau and HUD.
The seasonally adjusted estimate of new houses available for sale at the end of last month edged up by 0.4% sequentially, showcasing an 8% increase year-over-year at 470,000 units. The new-home sales report for September stands as the final key piece of housing data preceding the Bureau of Economic Analysis' initial estimate for third-quarter gross domestic product, according to Yaros.
Oxford has revised its expectations for third-quarter residential investment, now forecasting an annualized decline of 8.5%, an improvement from an earlier expectation of a 9.2% drop..