The pace of new-home sales in the U.S. sank 11.5% in September to an annual rate of 468,000, marking the lowest level in 10 months.
Wall Street had expected sales to flatline or fall slightly after a strong surge earlier in the year, but the dropoff was much sharper than expected. Economists had forecast sales to achieve a seasonally adjusted 550,000 rate. Sales for August were also revised down to a 529,000 pace from an original 552,000, which would have been a post-recession high.
Although sales fell in all regions, the northeastern U.S. experienced an unusually large 62% decline that could owe to temporary factors. Another factor in slower home sales may be rising prices. The median price of a new home in September was 13.5% higher compared to one year ago: $296,900 vs. $261,500.
Despite the big drop in sales in September, new-home purchases are up 2% in comparison to September 2014. Home builders have also sped up construction to tap into growing demand and the supply of new homes on the market jumped to 5.8 months from 4.9 months in August, setting a five-and-a-half year high.
