New Home Sales: Swift Rebound

Bottom Line:  New home sales rose more than expected for the third month in a row, accelerating sharply in September.  At 800k, September's sales were the strongest since March but still well below the pace seen in the second half of 2020, when sales averaged a stunning 934k annualized units.  While sales clearly topped early this year, they also appeared to have bottomed in June. These data largely confirm that housing has plateaued but is not necessarily heading lower. The pace of sales remains higher than at any point since the financial crisis.New Home Sales ROSE by 4.5% to 740k, after the prior month was revised  lower to 708k. This compared with market expectations for an increase to 715k, from the unrevised July level of 708k. Sales are now 24.3% BELOW their year-ago level.
 
The Inventory of Homes Available for Sale ROSE by 3.3% to 378k. Inventories are now 32.2% ABOVE their year-ago.
 
Combined with the increase in sales, the Months' Supply increased to 6.1 months from 6.0 months. This is modestly ABOVE a normal level of 6.0 months.Home Prices ROSE with median prices 20.1% ABOVE their year-ago level and with average prices 14.7% ABOVE their year-ago level.