Sales of new single-family homes in the United States rose 4.8% in September, recovering a portion of the substantial ground they lost in the previous month, according to the U.S. Commerce Department. Sales reached a seasonally adjusted annual rate of 770,000 units following major downward revisions to figures for the previous three months.
"Given the substantial downward revisions to home sales numbers for June, July and August, it must be said that this is still a fundamentally weak report," noted National Association of Home Builder (NAHB) Chief Economist David Seiders. "Moreover, the large sales gains reported in the West region are highly suspicious, given the results of our own builder surveys and large downward movements in existing-home sales in that region. On the positive side, builders do seem to be making progress on reducing the substantial overhang of unsold units on the market, according to the latest figures."
The inventory of new homes for sale edged down for a sixth consecutive month in September to 523,000 units as builders have cut back on the pace of housing starts and aggressively stepped up sales incentives. This inventory overhang amounts to an 8.3-month supply at the current sales pace, still high on a historical basis but down from a 9-month supply in August.
Seiders noted that there's still downward momentum in the single-family housing market, and the reported increase in new-home sales for September should not deter the Federal Reserve from enacting another interest rate cut at the Oct. 30-31 FOMC meeting.