New home sales were tepid in September

Sales of new homes hit a six-year high last month but August’s surge was revised down sharply, a sign that the housing market’s growth remains stubbornly tepid. 

The Commerce Department said on Friday that sales rose 0.2 percent, to a seasonally adjusted annual rate of 467,000 units, the best showing since July 2008 that comes amid a slow-growth trend in the sector on new home building.

{mosads}”Three consecutive months of sales upticks demonstrate steady growth in the housing market,” said Kevin Kelly, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Wilmington, Del.

August’s sales, which had jumped 18 percent, were revised down to 466,000, from 504,000 units.

“The August revision was not unexpected, as this figure seemed out of line with the modest housing recovery we have been seeing,” said David Crowe, NAHB’s chief economist.

Sales of new homes are up only 1.7 percent for the year and they are down in every region except the South, where they have increased 6.8 percent this year.

Still, despite the sluggish growth, sales are 17 percent above the September 2013 level of 399,000.

The median sales price of new houses sold in September was $259,000 while the average price was $313,200.

There were 207,000 new houses for sale at the end of September, about a five-month supply, the same as August.

“The continuing increase in the inventory of new homes points to builders’ confidence in the market,” Crowe said. 

Regionally sales made no gain in the Northeast, were up 12.3 percent in the Midwest and 2 percent in the South and fell 8.9 percent in the West.

Meanwhile, mortgage rates have dropped back below 4 percent heading into the typically slower winter sales season. 

“Consistent job creation and low mortgage interest rates are spurring the release of pent-up consumer demand,” Kelly said.