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Experts anticipated that new-home sales would decelerate in September, but the latest Census data show that sales were even lower than predicted.
Month-over-month, September new-home sales decreased 5.5 percent. Annually, sales dropped 13 percent. CNBC reports that the Census data is based on signed contracts, rather than closings data used by the National Association of Realtors for existing-home sales reports. The seasonally-adjusted annual rate for new-home sales of 553,000 in September is the lowest since December 2016, and experts mostly attribute this to rising rates.
Some will blame hurricanes in the South for the weakness, but sales in the Northeast fell to their worst level since 2015, and sales in the West, where prices are highest, fell harder than the South. Part of that may be new tax laws reducing deductions for state and local taxes. The analysts are not sugarcoating it. "This number really sucked," wrote Peter Boockvar, chief investment officer at Bleakley Advisory Group, noting that August's read was also revised lower. "Anyone watching home builder stocks or watching the data all year should not be surprised but its's clear this important area of the US economy, highly sensitive to price and rates, has obviously slowed sharply."
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