New-home sales continue to rise, diverging from existing-home sales

Sales of newly built homes continue to outpace sales of existing homes.

According to data released Thursday by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development, new-home sales hit a seasonally adjusted rate of 738.000, which is 4.1% higher than in August and 6.3% higher year over year.

Sale prices and inventory held mostly steady, with the median price landing at $426,300 and 7.6 months of supply at the current sales pace.

“Mortgage rates have been falling, which have enticed some buyers to purchase a new home, but other buyers are still waiting on the sidelines for rates to come down further,” Bright MLS chief economist Lisa Sturtevant said in a statement. “Some would-be buyers may also be sitting out until after the election.”

Regionally, the South continues to have stronger numbers than the rest of the U.S. In September, 477,000 homes were sold there, which is the most for any month this year by a substantial margin. It’s 5.8% higher than last month — the previous high for 2024 — and up 14.7% year over year.

Conversely, the Northeast continues to sag, hitting 28,000 new homes sold in September. While that’s up from 23,000 from August, it’s down 22.2% year over year. The West was flat compared to August and down 10.9% year over year, while the Midwest showed relative stability, falling 2.5% month over month and rising 14.9% compared to last year.

New-home sales trends remain the near inverse of those for existing homes. In September, existing sales fell 1% compared to August and were down 3.5% year over year. Months of supply was 4.3, though inventory is rising, up 23% from last year.

“New home sector will be increasingly in competition with existing homes, as more homeowners are listing their home for sale,” Sturtevant said. “Homebuilders may be forced to bring their prices down to attract buyers. New home prices are running about 5% higher than prices of existing homes in September. By contrast, in 2021, 2022, and parts of 2023, new homes were selling for between 20 and 30% more than existing homes.”