Sales of new single-family homes rose 2.1 percent to a seasonally adjusted annual rate of 1.2 million units in September following downward revisions to the June, July and August rates, the U.S. Commerce Department reported. The September sales pace was 0.1 percent below a year ago.
"Home builders are beginning to see a very modest slowdown in what has been a very robust sales pace this year," said David Wilson, president of the National Association of Home Builders (NAHB). "Housing demand remains quite healthy and our monthly survey of builders indicates that they continue to see plenty of traffic in their sales offices and still have an upbeat view of sales prospects for the next 6 months."
"We are definitely headed for record home sales in 2005," said NAHB Chief Economist David Seiders. "However, the pattern of sales in recent months suggests that the new-home market may have tapped out around mid-year, a conclusion consistent with findings from our builders surveys.
"We're projecting further modest erosion in home sales and housing production as the interest rate structure continues to move higher, although housing market activity will be buoyed to some degree in the wake of this year's hurricane season," Seiders added.
Two regions posted increased sales for the month. In the Midwest, sales were up 24.9 percent, while in the South, sales increased 5.6 percent. Sales dropped 20.0 percent in the Northeast and were down 11.8 percent in the West.
The inventory of new homes for sale was up slightly to 493,000 for September, a 4.9 months' supply at the current sales pace. Of that total, for-sale units that were not yet started represented 22 percent--a historically high share. Units still under construction were 57 percent of the inventory, and completed homes for sale units were 21 percent of the total. Completed units were on the market for less than 4 months, essentially the same period as a year earlier.
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