In September, sales of new homes in the US surged to a 17-month high, reaching an annualized rate of 738,000 as builders offered incentives and mortgage rates briefly dropped.
New single-family home purchases rose 4.1%, surpassing economists’ expectations of 720,000, according to the Commerce Department’s data released Thursday. This upswing was particularly pronounced in the Northeast, where sales grew 21.7%, followed by a 5.8% rise in the South.
A combination of lower mortgage rates in September and builder incentives helped to boost sales. These incentives, including rate buydowns and closing cost coverage, were widely offered, with a survey reporting that 74% of builders provided 30-year rate buydowns last month. These strategies have given builders an edge over the resale market, where high mortgage rates have led many homeowners to hold off on listing properties.
The median price for a new home rose to $426,300, slightly above last month but close to year-ago levels. Builders have been working to reduce the backlog of available inventory, which remains at near-record highs, after pandemic-era construction led to significant increases in supply.
Market Watch and Bloomberg contributed to this report.
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