New-Home Sales Inch Up to Post-Recovery High, But Not Where They Should Be

There’s more than one way to consider Friday’s latest new-home sales figures from the U.S. Commerce Department.

September’s seasonally adjusted rate of 467,000 was the highest since July 2008, but still well below historical levels considered normal. The housing recovery remains lackluster, but at least it’s moving forward — just not at an even pace by a long shot.
Sales in September were up 17 percent from a year earlier. Over the first nine months of the year, sales increased 1.7 percent from the same period in 2013.
But on a month-to-month comparison, sales of new single-family homes barely budged, just 0.2 percent in September.
Nonetheless, builders are optimistic for now. Growth is growth, no matter how slight.
“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. “Consistent job creation and low mortgage interest rates are spurring the release of pent-up consumer demand.”
However, new-home purchases for August were revised down sharply from an initial estimate of 504,000. The Commerce Department also reduced the sales figures for July and June. These reports are often volatile and subject to major monthly revisions.
“The August revision was not unexpected, as this figure seemed out of line with the modest housing recovery we have been seeing,” said NAHB Chief Economist David Crowe. “The continuing increase in the inventory of new homes points to builders’ confidence in the market.”

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