New homes in high demand; sales surge as 2018 looms

Aly J. Yale
The Mortgage Reports contributor

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It’s all about new properties with today’s home buyers. According to new data from the U.S. Department of Commerce, sales of new homes spiked in October, jumping more than 6 percent over the month.

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Sales up

About 685,000 new homes sold in October – up from 645,000 in September. It’s the third month in a row that sales have jumped, and their highest level in the last 10 years. They’re currently up 18.7 percent from this time last year.

According to a recent poll by Reuters, economists predicted a downturn in new home sales of about 6 percent this month. It seems strong numbers in the Northeast region helped prove them wrong. The area saw sales jump more than 30 percent in October alone.

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The Midwest experienced big gains as well, with new home sales rising 17.9 percent for the month. The West and South saw increases of 6.4 percent and 1.3 percent, respectively.

The Commerce Department’s report shows the majority of the new homes sold last month – a little over two-thirds – were either under construction or still in the planning stages.

Prices down

Fortunately for buyers, all this demand for new homes doesn’t seem to be driving prices up. In fact, the Commerce Department’s data shows the median price of new homes was actually down in October, hitting $312,8000. That’s a 3.7 percent dip over the month.

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Inventory of new homes is also up, spelling more good news for today’s buyers. New home inventory jumped 1.4 percent for October – its highest point since 2009. There’s currently a 4.9 month supply of new homes on the market.

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Want to hop on the new home bandwagon? With rates at historical lows, now’s the perfect time to pull the trigger. Shop around and see what mortgage rates you qualify for today.

Verify your new rate (Feb 26th, 2020)