New-Home Sales in September Tank
At a disappointing estimate of 553,000, new-home sales in September tanked, backtracking 5.5 percent from the previous month, according to the Commerce Department. There were 327,000 for-sale homes in September, representing 7.1-months' supply—a high—with a median price of $320,000.
"Home price gains and rising interest rates are slowing down the housing market, particularly in high-cost areas and among entry-level buyers who are sensitive to price increases," said Robert Dietz, chief economist of the National Association of Home Builders (NAHB), in a statement. "Builders need to provide homes at different price points to address these affordability concerns. Meanwhile, overall job and economic growth should help support the housing market in the months ahead as it adjusts to higher mortgage interest rates."
"Builders have not been building like they used to for some time now—and with winter coming, they appear to be in retreat even from those historically low levels," said Aaron Terrazas, senior economist at Zillow, in a statement. "The scourge of storms and higher construction costs aside, builders can read the early signs of a cooling housing market as well as anyone, including a slowing in home value growth, rising mortgage rates and an uptick in price cuts.
"With an increasingly cloudy economic outlook over the next two years, builders may be growing weary of putting sticks in the ground that won’t be delivered to buyers for several months' time," Terrazas said. "The longer the delivery horizon, the more blurred the outlook appears, and having only barely recovered from the last downturn, no one is eager to be swept away in the next economic storm brewing just beyond the horizon."