Sales of new homes in the United States soared 14 percent last month from August as buyers snapped up real estate despite high prices and scarce supply, the government reported Tuesday.
New home sales hit an annual rate of 800,000 in September, seasonally adjusted, far above August’s pace, according to the Commerce Department, which also reported supply becoming scarcer and prices climbing.
The US real estate market has boomed since the start of the Covid-19 pandemic thanks to the dislocations of the virus and low mortgage rates enabled by the Federal Reserve’s zero rates policy.
The market has been predicted to lose some of its spark as high prices and supply shortages take their toll. Despite the better than expected September data, Nancy Vanden Houten of Oxford Economics predicted that dynamic would ultimately play out as the year draws to a close.
“We expect new home sales to move mostly sideways over the rest of 2021 as strong demand and low mortgage rates are tempered by high prices and construction backlogs,” she wrote in an analysis.
The stock of homes dipped last month to a 5.7-months supply at the current sales pace, down 12.3 percent from August and reversing gains in recent months as builders raced to catch up with demand.
That fueled another jump in the median sales price to $408,800, a new all-time high.
Sales jumped the most in the Northeast with a 32.3 percent gain, while the South saw an increase of 17.5 percent. The West saw a more modest 8.2 percent rise, while sales in the Midwest dipped 1.5 percent.
