New-home sales are back. After a few months of drops in the number of buyers scooping up these abodes with that fresh, never-been-lived-in smell, sales are once again surging.
The number of buyers who closed on newly built residences spiked in September, according to a joint report by the U.S. Census Bureau and U.S. Department of Housing and Urban Development. They jumped 18.9% from August to September and were up 17% from September 2016.
(Realtor.com® looked only at the seasonally adjusted numbers in the report. These have been smoothed out over 12 months to account for seasonal fluctuations.)
That’s good news for buyers looking for a home of their very own at a time when there just aren’t enough properties on the market. There were 9% fewer homes on the market in September compared with a year ago, according to realtor.com data.
“Stronger new-home sales should encourage builders to keep building,” says realtor.com’s chief economist, Danielle Hale. This “should help increase the number of homes available for sale.”
Part of the bump may be due to buyers in areas ravaged by Hurricanes Harvey and Irma getting back into the market. It may be that their homes were damaged and they were able to get into new ones. Or, perhaps, these buyers waited until the storms passed and then assessed the damage before going ahead with the purchases.
The number of sales jumped in the South, rising 25.8% month over month and 23.1% year over year.
But the biggest increases were in the Northeast, with the number of new-home closings rocketing 33.3% over August and a whopping 54.8% over the previous year. In the Midwest, monthly sales rose 10.6%, but they tumbled 2.7% annually. Monthly sales were up 2.9% in the West and increased 4.4% from September 2016.
The median sale price was $319,700 in September. That was still 30.4% higher than the median price of an existing home at $245,100 in September, according to National Association of Realtors® data.
That’s because high costs for land, construction labor, and building materials drive up the expense of putting up new homes. Building and zoning restrictions, regulatory red tape, and difficulty obtaining financing also contribute to those costs.
That’s why only about 13% of the new homes sold were under $199,999—despite the high demand for more affordable abodes. The bulk, about 56%, were in the $200,000 to $399,999 range. About 12% cost between $400,000 and $499,999, and 19% were a cool half-million and above.