New Home Sales: Steady Following Strong Summer

Bottom Line: New home sales in September fell only slightly after a strong finish to the summer. Sales over the last three months have averaged 691K and are 2.2% above the six-month average of 676K. The months' supply held steady slightly as sales fell in-line with a decline in inventories. Though prices fell in September, mostly due to a change in composition of sales, prices have continued to climb relative to their year ago levels. Overall, housing data has shown continued improvement since the weakness in 2018. While existing home sales earlier in the week showed declines this new home sales data (based on contract signings rather than closings like existing home sales reports) reveals the potential for further modest strength going forward. New Home Sales FELL by 0.7% to 701k, after the prior month was revised lower to 706k. This compared with market expectations for a decline to 702k, from the unrevised August level of 713k. Sales are now 15.5% ABOVE their year ago level, -- but they are still 49.5% BELOW their July 2005 peak. The Inventory of Homes Available for Sale FELL by 0.6% to 321k. Inventories are now 0.9% BELOW their year ago level but still 43.9% BELOW their July 2006 peak level. Combined with the decline in sales, the Months' Supply was unchanged at 5.5 months. This is modestly BELOW a normal level of 6.0 months and well BELOW its peak of 12.2 in January 2009. Home Prices FELL with median prices 8.8% BELOW their year ago level and with average prices 6.1% BELOW their year ago level.