New residential home sales blew away last year’s figures, soaring 32 percent year-over-year, according to data released Monday by the U.S. Census Bureau.
Sales of new single-family homes hit an adjusted annual rate of 959,000 during the month of September, according to the data, a 3.5 percent increase from the month prior.
“Home buying demand remains robust due to low rates and continued demographic demand,” Odeta Kushi, the deputy first economist at First American wrote on Twitter. “Demand is spilling over from the existing home market where homes are even harder to find.”
The median sales price in September was $326,800, while the average sales price was reported at $405,400, according to the data.
Supply continues to be low, with only 3.6-months supply at the current sales pace at the end of the month.
Despite the eye-popping increase, new residential home sales actually came in below expectations, according to John Pataky, executive vice president at TIAA Bank. The new home sales sector has a number of challenges, including sky-high lumber costs and the ongoing pandemic.
“The housing market, which has been surging for the past several months in defiance of the broader economy, has started to show some cracks, and this month’s new home sales figures indicate that the housing market might be finally losing some steam,” Pataky said. “As the economy continues to gingerly get back to its feet, buyers have continued to enter the market and builders have done their best to keep up with surging demand.
“However, the new home market is not immune from the same problems facing the broader market, namely tightening inventories and climbing prices.”