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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

U.S. new-home sales surge to fastest clip since February 2022

New homes are shown in Antioch, Calif., on March 31, 2022.  (David Paul Morris/Bloomberg)
From staff and wire reports Bloomberg

From staff and wire reports

U.S. sales of new houses rose in September to the fastest pace since early 2022, suggesting there’s still some appetite for homes despite soaring mortgage rates.

Purchases of new single-family homes increased 12.3% to a 759,000 annualized pace last month, government data showed Wednesday.

Overall home sales in the Spokane area, however, have declined year-over-year, according to data from Spokane Realtors.

Closed sales declined about 20% in September, from the previous year. Some 637 homes sold last year compared to 507 last month.

The median home price in Spokane is holding at about $408,000 and inventory, the number of available homes, is up about 2% year over year.

At the end of September, some 1,153 homes were available, which generally means it would take about 2.3 months to sell all homes listed for sale, according to the website.

The number of Spokane residents willing to sell their homes continues to decline. Homeowners listed 850 homes for sale in September 2022, but only 832 last month.

The national figure for new home sales topped all estimates in a Bloomberg survey of economists.

The market for new homes has broadly held firm in the face of decades-high mortgage rates and elevated housing prices.

Though these factors risk pushing more prospective buyers to the sidelines, the lack of listings in the resale market has so far underpinned demand for new construction.

New-housing inventory rose to the highest level since February.

Homebuilders, meanwhile, have been offering financial incentives in an effort to lure buyers.

As mortgage rates have increased, homebuilder PulteGroup Inc. “responded with adjustments in product, pricing and incentive programs that successfully address consumers’ biggest pain point – affordability,” Chief Executive Officer Ryan Marshall said Tuesday on the company’s earnings call.

The median sales price of a new home dropped to $418,800, according to the report from the Census Bureau and the Department of Housing and Urban Development.

Despite the decline, that’s still well above prepandemic levels.

Whether the pace of sales can be sustained with such high borrowing costs is unclear.

According to the Mortgage Bankers Association, the average contract rate on a 30-year fixed mortgage jumped to 7.9% last week, pushing down a measure of applications to finance a purchase down to the lowest level since 1995.

Sales rose in all regions, led by the Northeast and South, where the pace was the fastest since the end of 2021.

New-home sales are considered a timelier barometer than purchases of previously owned homes, which are calculated when contracts close.

Those sales fell in September to the lowest level since 2010 as the market deteriorated further.

The data are volatile, however. The report showed 90% confidence that the change in sales ranged from a 4.3% decline to a 28.9% gain.