New home sales in the U.S. fell significantly in September from a month earlier. Though most analysts expected a slight drop-off from a record-high August, they were not expecting the worst month of the year with regards to new home sales.
According to the U.S. Census Bureau, just 468,000 new homes were sold in September. That was down 11.5 percent from August, when new home sales reached a seven-year high. It was also the fewest number of new homes sold in any month this year.
U.S. News and World Report reports analysts had predicted between 540,000 and 550,000 new homes to be sold in September. While the numbers are disappointing, experts pointed out new home sales are typically highly-volatile. Additionally, new home sales is just a small slice of the overall housing market so it is hard to make any broader conclusions.
While new home sales fell more than expected, there have been several recent reports indicating housing starts across the nation are back on the rise. As the U.S. News and World Report pointed out, “home builders haven’t been this bullish about the housing market since the housing bubble was expanding before the Great Recession.”
The Commerce Department recently backed up the assertion. It reported housing starts in September rose to an adjusted annual rate of 1.2 million units, the sixth straight month where housing starts surpassed one million.
The new home sales report was certainly an eye opener given what was expected. However, given the other good news and the volatility inherent of new home sales, it could wind up being mostly an aberration.