Nation's Building News Online

September Closes Record Quarter for New Home Sales

This year’s third quarter was the best on record for new single-family home sales, with the sales pace proceeding at a seasonally adjusted annual rate of 1.145 million units in September, virtually unchanged from the previous month, the Commerce Department announced last week.

“Housing continues to provide major muscle to the national economy as we head toward the end of the year,” said NAHB President Kent Conine.

He partly attributed the strength of the housing market to “excellent financing conditions that are lowering the threshold for first-time home buyers.”

NAHB Chief Economist David Seiders noted that, “considerable strength remains” in the new home market, with inventories of unsold homes remaining at a “thin” 3.7-month supply in September and median prices up 5.6% from a year earlier.

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Solid demographic fundamentals, including strong immigrations, are also bolstering the demand for housing, Seiders said.

New home sales in September increased 26% in the Northeast and 12.4% in the West. Sales declined 2.5% in the South and 18% in the Midwest.

Investment in housing “unquestionably boosted the national economy in the third quarter,” Seiders said, and the solid performance of the industry should continue.

“If there’s anything troubling on the horizon, however, it’s the Administration’s attempt to re-regulate Fannie Mae and Freddie Mac and possibly eliminate their GSE (Government-Sponsored Enterprise) status,” he said.

“This effort has the potential to adversely affect capital flows to housing finance and raise home mortgage rates, which could seriously undermine the economic recovery process” that is now gaining momentum, he said.

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