Bloomberg News/Landov A worker carries building supplies outside a partially completed home in Georgetown, Texas.
The numbers: New-home sales ran at a seasonally adjusted annual rate of 553,000 in September, the Commerce Department said Wednesday.
What happened: Sales of newly-constructed homes swooned to the lowest since December 2016. September’s selling pace of 553,000 was 5.5% lower than in August, and 13.2% lower than a year ago.
It badly missed the MarketWatch consensus forecast of a 620,000 pace, and revisions to prior months were all downward.
The median selling price in September was $320,000, 3.5% lower than a year ago. At the current pace of sales, it would take 7.1 months to exhaust available supply, a 6-year high.
Related: More Americans are buying new homes that haven’t even been started yet
Big picture: The government’s reports on residential construction are based on small samples and often revised heavily, making it unwise to rely on data from any single month for the big picture. But the story so far in 2018 has been one of continuing deterioration. For the year to date, sales are just 3.5% higher than in the same period last year, a measurement that's been falling steadily throughout the year.
For years, the housing story has been about strong demand, and limited supply. That dynamic may be starting to shift, however, as unrelenting price gains, higher mortgage rates, and scant choices may be nudging would-be homebuyers out of the market.
Inventory in the market for previously-owned homes has been inching up and sales declining, suggesting that home shoppers are finding better options.
What they’re saying: The BTIG/HomeSphere September survey, conducted by a team of analysts led by Carl Reichardt, Jr., found that conditions for respondents “deteriorated markedly” this month. About one-third of survey respondents — small and mid-sized builders across the country — said sales were worse than they had expected. Some 22% said sales rates were lower than in September 2017, more than the 15% who reported lower sales than year-ago levels in August.
Market reaction: Stocks were little-changed after the new-home sales release, with the Dow Jones Industrial Average DJIA, -0.18% up fractionally, and the S&P 500 SPX, -0.42% down nearly half a percent.
Also see: This chart shows the haves and have-nots of the housing market, and it’s getting worse
