Sales of new homes fell by 3.5% in September to a seasonally-adjusted annual rate of 959,000 million units, the Commerce Department said Monday, as the housing market’s hot summer buying season cooled.
The Commerce Department said Monday that despite the modest decrease, sales of new homes are up 32.1% from a year earlier. However, the pandemic may start to weigh on the market as the colder winter months arrive and with coronavirus cases spiking across much of the U.S.
“While strong demand and low mortgage rates are supportive of home sales, the resurgence in COVID-19 cases, a recovery that may be shifting into reverse and a weak labor market pose downside risks,” said Nancy Vanden Houten with Oxford Economics, in an email.
The housing market, like most of the economy, came to a near standstill in March and in April, causing the typical spring summer buying season to be delayed until the summer. Once economies reopened, pent up demand translated into sales of both new and existing homes, driving home prices in many places to record highs. In July, home sales spiked 13.9%.
The July figures may have been the top of the housing market. New home sales for August were revised downward to 994,000 from a previously reported 1.01 million units.
The median price of a new home sold was $326,800, according to the Commerce Department.
Last week, the National Association of Realtors said existing home sales increased 9.4%. On a seasonally-adjusted rate, the selling pace of existing homes climbed to 6.54 million annualized units. That is the highest level for that metric since February 2006, at the peak of the previous housing bubble.