New Home Sales at 6 Year High

Even though the housing recovery remains fragile, the good news is that single family home sales have reached a six-year high. Sales of new homes rose slightly in September, making it the highest since 2008. The Commerce Department announced that sales increased 0.2%. One reason for the increase in sales may be that the median price of a new home fell four percent from the previous year. This is the lowest it’s been since August 2013. The median price for a new home is currently $259,000.

The sales of new homes has fluctuated throughout the country, with the highest jump in the Midwest. Sales rose 12.3% in this area. They rose two percent in the South, were stagnant in the Northeast, and actually fell in the West. The trend also seems to be toward smaller homes once the cooler seasons start. Homes under $199,999 increased while the sale of properties from $300,000 to $499,999 decreased. New home sales account for a small portion of the overall home sales, with approximately 8% of the total housing market. With sales rising, however, this in turn has been a boost to the stock market. Stock for new houses went up 1.5%, the highest level since July 2010.

Since new home sales tend to be volatile, it helps to look at the big picture to get an idea where the market is heading. In the third quarter of this year new home sales were up by 15% from the same time period in 2013. While we’re still a long way from the pre-recession peak of 1.3 million new home sales, there is reason for optimism. Builder confidence continues to rise and credit is beginning to flow again.

When you're ready to purchase a home, please contact me at barkerloans@gmail.com or 708.473.7688.