November 4, 2017 – September’s new home sales data delivered some positive news for a housing market that has recently shown signs of sluggishness. Sales contracts for newly built single-family homes grew 18.9% in September and are running 8.6% higher on a year-to-date basis.
Inventory levels of new homes have been rising, but currently register at only a 5-months supply. Moreover, the largest gains in new home sales are homes listed in inventory but which have not begun construction — a clear signal that additional home building is needed.
Another indication of unmet demand is the rise in home prices, which recently posted an annual gain of 6.1%, according to the Case-Shiller Index. However, the higher prices have not negatively affected the national homeownership rate, which increased to 63.7% during the second quarter, making it the fifth consecutive quarter of noticeable gains. Recent gains for homeownership appear to mark a turning point for housing demand.
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