New home sales in the U.S. unexpectedly showed a sharp decrease in the month of September, according to a report released by the Commerce Department on Monday.
The report said new home sales tumbled by 3.5 percent to an annual rate of 959,000 in September after jumping by 3 percent to a revised rate of 994,000 in August. The pullback surprised economists, who had expected new home sales to surge up by 2.8 percent.
“We expect the pace of sales to moderate further in the fourth quarter,” said Nancy Vanden Houten, Lead U.S. Economist at Oxford Economics.
She added, “While strong demand and low mortgage rates are supportive of home sales, the resurgence in Covid-19 cases, a recovery that may be shifting into reverse and a weak labor market pose downside risks.”
The unexpected pullback in new home sales was partly due to a steep drop in sales in the Northeast, which plunged by 28.9 percent to a rate of 32,000.
New home sales in the Midwest and South also slumped by 4.1 percent and 4.7 percent, respectively, while new home sales in the West spiked by 3.8 percent.
The Commerce Department also said the median sales price of new houses sold in September was $326,800, up 1.4 percent from $322,400 in August and up 3.5 percent from $315,700 in the same month a year ago.
The estimate of new houses for sale at the end of September was 284,000, representing a supply of 3.6 months at the current sales rate.
Last Thursday, the National Association of Realtors released a report showing a much bigger than expected spike in U.S. existing home sales in the month of September.
NAR said existing home sales soared by 9.4 percent to an annual rate of 6.54 million in September after jumping by 2 percent to a revised rate of 5.98 million in August.
Economists had expected existing home sales to surge up by 5.0 percent to a rate of 6.30 million from the 6.00 million originally reported for the previous month.
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