New Homes Sales Gained 41.6% Year-Over-Year in October, Beating Forecast

New Residential Sales for September Revised to Highest Annual Rate Since 2006

Washington, D.C. (PPD) — The U.S. Census Bureau and the U.S. Department of Housing and Urban Development (HUD) jointly reported the new residential sales statistics for October 2020. New home sales of single-family houses came in at a seasonally adjusted annual rate of 999,000 in October, and are now up 41.6% (±22.6%) year-over-year.

Forecasts ranged from a low of 935,000 annual rate to a high of 1,035,000. The consensus forecast was looking for an annual rate of 975,000. While the figure for October is technically a 0.3% (±13.6%) decline month-over-month, it’s because the revised rate for September is now 1,002,000, the highest since November 2006.

The median sales price of new houses sold in October 2020 came in at $330,600, while the average sales price was $386,200. The seasonally-adjusted estimate of new houses for sale at the end of October was 278,000, representing a supply of 3.3 months at the current sales rate.

Housing, Once Primed to Lead Economic Recovery, Now Uncertain

As People’s Pundit Daily (PPD) recently reported, indicators widely showed the U.S. housing market was “booming”, surpassing pre-pandemic levels and expectations. Experts foresaw housing leading the economic recovery and raised growth forecasts for the sector.

The NAHB Housing Market Index (HMI) reported builder confidence soared another 5 points to 90 in November, smashing the all-time high and beating the consensus forecast. However, the apparent economic firing on all four cylinders is no longer a given following the election, as changing policies will hinder growth.

“Historically low mortgage rates, favorable demographics and an ongoing suburban shift for home buyer preferences have spurred demand and increased new home sales by nearly 17% in 2020 on a year-to-date basis,” said NAHB Chairman Chuck Fowke. “Looking ahead to next year, regulatory policy risk will be a key concern given these supply-side constraints.”