Sales of new single-family homes in the US fell 0.6% in September as higher mortgage rates linked to the Middle East conflict made it harder for buyers to afford homes. Sales fell to a seasonally adjusted annual rate of 676,000 units in September, the US Census Bureau said on Tuesday. This was lower than the revised annual rate of 680,000 units recorded in August.
New home sales are recorded when a sales contract is signed or the transaction closes, making them one of the earliest indicators of demand in the housing market. However, new homes account for only a small share of total US home sales, Reuters reported. Higher mortgage rates linked to the Middle East conflict have increased borrowing costs for people looking to buy homes. New home sales fell in the Midwest and South regions in September. However, home sales rose sharply in the Northeast and West.
New home sales dropped 5.3% in September compared with the same month a year earlier, showing that demand remained under pressure.
This has made home purchases more expensive and weakened demand in an already difficult housing market, according to Reuters. This shows that demand for homes changed across different parts of the US, according to Census Bureau data cited by Reuters.
The number of new homes available for sale also fell. The government revised August’s new home sales rate to 680,000 units from the earlier estimate of 684,000 units, showing that sales were weaker than previously reported, according to the Census Bureau. The median price of a new home fell 3.9% in September from a year earlier to $400,400. Most new homes sold in September cost less than $499,999. This means many buyers chose homes priced below $500,000, even though the median home price remained high. It dropped to 476,000 in September from 481,000 in August, according to government data cited by Reuters.
Because fewer people wanted to buy homes and builders cut prices to attract buyers, this may be.
Economists polled by Reuters had expected new home sales to fall to an annual rate of 650,000 units in September. The actual figure of 676,000 units was higher than their forecast, even though sales declined from August.
