New home sales posted a double-digit percentage gain in September, even with mortgage rates at a 23-year high, because of the lack of resale market inventory. Sales of newly built, single-family homes in September was estimated at a 759,000 seasonally adjusted annual pace, according to the U.S. Department of Housing and Urban Development. This is a 12.3% increase over a upwardly revised reading of 676,000 in August. The pace of new home sales in September was up 33.9% from a year ago.
According to Eye On Housing, a new home sale occurs when a sales contract is signed or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the September reading of 759,000 units is the number of homes that would sell if this pace continued for the next 12 months.
New single-family home inventory in September was 435,000, down 5.4% compared to a year ago. This represents a 6.9 months’ supply at the current building pace. A measure near a 6 months’ supply is considered balanced. Total new home inventory peaked in October 2022 at 466,000 and has been declining since that time.