New home sales gains screech to a virtual halt in September

Sales rise just 0.2% led by massive drop in West

Gains in sales of new single-family houses in September 2014 came to a screeching virtual halt, printing at a seasonally adjusted annual rate of 467,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development.

This is 0.2% above the revised August rate of 466,000 and is 17% above the September 2013 estimate of 399,000, when sales were slowing dramatically on rising interest rates last year.

This was below analyst expectations of 462,000, and after August’s indecipherable 18% jump, which has now been revised downward 10%.

Worse, July’s sales gains were revised downward to a solid decline.

“The volatility of this report makes it difficult to gain a true picture of what’s going on when taking a granular look. Slowly but surely the housing market as a whole is improving, but it ultimately marches to the beat of the economy, and this is especially true for new home construction and sales,” said Quicken Loans Vice President Bill Banfield. “Once we see the economy and job improvement gain traction, the housing numbers will follow.”

The median sales price of new houses sold in September 2014 was $259,000; the average sales price was $313,200. This represents a 4% drop.

The seasonally adjusted estimate of new houses for sale at the end of September was 207,000.

This represents a supply of 5.3 months at the current sales rate.

September’s weak sales performance was led by big a decline in the West, which was down 8.9% from August, and further hampered by stagnant sales in the northeast and meager gains in the South. 

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