New Home Sales are at a High in this decade!

 According to Bloomberg- U.S. purchases of new homes unexpectedly advanced in broad fashion last month, reaching the strongest pace in a decade and offering an encouraging signal for residential construction, according to government data released Monday.

Highlights of New-Home Sales (October)

Single-family home sales rose 6.2% m/m to 685k annualized pace (est. 627k), the highest since Oct. 2007, a revised 645k rate Purchases in the South increased for a third month, to the fastest pace in 10 years Median sales price increased 3.3% y/y to $312,800 Supply of homes at current sales rate fell to 4.9 months, the smallest since July 2016, from 5.2 months; 282,000 new houses were on market at end of October

Key Takeaways

The report showed the U.S. South region continued to recover from a pair of hurricanes. Purchases in other areas of the country, including a 17.9 percent surge in the Midwest, also climbed.

The number of properties sold in which construction hadn’t yet started reached the highest level since January 2007, signaling residential construction will accelerate in coming months.

A steady job market and low mortgage costs are helping propel demand for real estate and pushing up property prices. At the same time, it’s a hurdle for some prospective buyers, especially younger Americans and those entering the market for the first time. The average selling price in October reached a record high $400,200, probably reflecting construction of higher-end homes.

New-home sales, tabulated when contracts get signed, account for about 10 percent of the market. They’re considered a timelier barometer than purchases of previously owned homes, which are calculated when contracts close and are reported by the National Association of Realtors.