- Mike Englund, chief economist at Action Economics LLC
Newly built home sales, which make up 7.8% of the housing market, dropped to near a one-year low last month following two consecutive months of gains. According to the Commerce Department, sales plunged 11.5% to a seasonally adjusted annual rate of 468,000 units, the lowest level since November 2014. Moreover, August's sales pace was revised down to 529,000 units from the previously reported 552,000 units.
The moderation in new home sales is likely to be short-lived as other housing reports painted a positive picture of the sector. September data on existing home sales, homebuilder confidence and housing starts were fairly strong. Sales of existing homes surged 4.7% in September to the second-highest pace in eight years, as low interest rates and pent-up demand supported the housing recovery. US home building recovered in September after two consecutive months of declines, the Commerce Department said last week, largely due to a sharp rise in construction of apartments and other multifamily housing. Moreover, a gauge of home-builder sentiment jumped to a 10-year high in October, a sign of momentum for a key sector of the economy.
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