New home sales data

New home sales in October totaled 679k, 42k below expectations, September was revised down by 40k to 719k and August by 14k to 662k. As the number of homes for sale rose, months’ supply was 7.8, up from 7.2 in September and 7.8 in August. The median home price dropped sharply, by 17.6% but mix is a huge influence here as there was a drop in the number of homes sold valued more than $500,000 and no change in the number of homes sold priced below that. It is very volatile month to month too. Also, builder discounts factor in here. Existing home prices are still increasing low single digits after the huge rise over the past few years.

Smoothing out the monthly volatility in this data set, the 3 month average thru October was 689k vs the 6 month average of 697k and the 12 month average of 666k. We know things have hung in here because of the need for new supply, notwithstanding the sharp rise in rates. Also, I’ll repeat here some comments from the NAHB builder survey seen a few weeks ago that has helped and this was for November instead of today’s home sales data for October.