Sales of new single-family homes rose 5.7 percent in the month September, to a seasonally adjusted annual rate of 389,000, according to data released today by the Commerce Department that gives continuing indications of a housing market recovery.
The rate of new home sales was 27 percent higher than the seasonally adjusted annual rate of 306,000 for the September 2011 housing market, according to the federal data. The average price of a new home sold in September was $292,400, down slightly from $293,900 for August but up from $255,400 for September of 2011.
September’s rate of new home sales is the highest since the home buyer tax credit expired in early 2012, according to an Eye on Housing blog published today by the National Association of Home Builders, or NAHB, a Washington, DC-based industry association. The three-month moving average of new home sales has been steadily increasing for more than 12 months, fueling a growing consensus that the U.S. housing market has turned a corner.
The increase in sales is reducing the inventory of available new homes to a seven-year low, according to the NAHB, which reports the existing supply of new homes will last for 4.5 months if sales continue at the current pace. The number of new homes that are completed and move-in ready remains at a record low of 38,000, according to the NAHB, which describes home builders as “cautious about building ahead of the market.” Tight credit conditions remain a drag on builders’ outlook for the housing market.
Median home prices jumped 11.7 percent from September 2011 to $242,400 in September 2012, according to the NAHB. The group attributes the price increase primarily to buyers with equity and access to credit moving up to more expensive homes, rather than an overall increase in prices for the housing market.
The latest data also reveals significant regional variations in home prices, according to the NAHB. Over the third quarter, sales rose by 18.5 percent in the Northeast, but fell 8.2 percent in the Midwest. New home sales rose 4.9 percent in the South and 4 percent in the West.
More housing market news is due Thursday when the National Association of Realtors is scheduled to report pending home sales for the month of September.