Photo: Robert Clark
Following a summer laden with lackluster housing activity, new home sales skyrocketed to their highest level in a decade in September.
Rejuvenated sales in hurricane-affected markets likely were the primary driving force behind September’s surge, according to a report released earlier this week by the listing site Zillow.
Over the last month, new home sales increased almost 19 percent to 667,000 units at a seasonally adjusted annual rate (SAAR), based on the latest Census data. This was the highest sales level recorded in any single month since October 2007.
Sales were up 17 percent from last year in September, ending two consecutive months of annual declines.
The South saw the largest rebound in sales, making up more than three-quarters of the overall increase — although sales were up in other regions as well. Sales in the South grew by an impressive 25.8 percent from August to September, compared to a 10.6 percent rise in the Midwest and a 2.9 percent increase in the West.
“Out of the total 106,000 additional new home sales nationwide in September relative to August, 78 percent were in the South,” says Zillow in the report.
The marked increase in the South has been attributed to recovery from Hurricanes Harvey and Irene, which caused devastation in parts of Texas and Florida.
The recovery from Hurricanes Harvey and Irma, which hit Texas and Florida in late August and early September, was very clearly the driving force behind the rebound, says Zillow.
“Still, the increase was broad-based across the country. If new home sales in the South had increased in line with the West, nationwide new home sales would still have been up 4.1 percent,” Zillow Senior Economist Aaron Terrazas tells BuzzBuzzNews.
Texas has long been the single largest contributor to new home sales nationwide so as the region rebuilds, we can expect stronger new home over the next 6 to 12 months, adds Terrazas.
Meantime, inventory remained unchanged from the previous month in September at 279,000 units (SAAR), comparable to June 2009 levels but up over 15 percent from September 2016. However, Zillow points out that national inventory levels are still low by historic standards, especially when controlling for population growth.
The national median price for new homes grew 3.3 percent monthly to $315,750 in September, up 1.6 percent from last year. September’s figure was still just below the record high of $330,245 recorded in July 2017.
Click here to read the entire report.