New Home Sales Jumped 18.9% in September, Ten-Year High

New Home Sales Jumped 18.9% in September, Ten-Year High

New home sales have experienced a sharp increase, according to Trulia's New Home Sales report for September also released Wednesday, which Trulia believes may have stemmed "from a three-month-skid".

Analysts had predicted new home sales number would retreat again in September, on the heels of a 9.4 percent loss in August. The earlier estimate for August was revised upward, but only by 1,000 units to 561,000.

"With the month's supply of new homes dropping to tie the lowest level in a year, it suggests the signs of a slowdown in new home sales over the past few months were actually false positives", said Ralph McLaughlin, Trulia's Chief Economist. "As existing-home inventory remains tight, we can expect new-home sales to continue to make gains in the months ahead". Sales soared 17.0 percent on a year-on-year basis in September.

A supply crunch of existing homes has frustrated many would-be buyers and hobbled the housing market this year.

Activity was also hampered by Hurricanes Harvey and Irma, which weighed on homebuilding in September and hurt the sales of previously owned homes in the South. Housing is expected to have been a drag on economic growth in the third quarter.

New home sales in the Northeast spiked by 33.3 percent to a rate of 48,000, while new home sales in the South jumped by 25.8 percent to a rate of 405,000.

Last month, 19,000 homes were sold for $500,000 or higher, more than the 13,000 that were sold for $200,000 or less. At September's robust sales pace it would take 5.0 months to clear the supply of houses on the market, down from 6.0 months in August.

With sales surging in September, the inventory of new homes on the market was unchanged at 279,000 units.

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