Sales of newly built, single-family homes fell to a seasonally adjusted annual rate of 544,000 units in
October after an upwardly revised September report, according to newly released data by the U.S.
Department of Housing and Urban Development and the U.S. Census Bureau. This is the lowest sales
pace since December 2016. However, on a year-to-date basis, sales are up 2.8 percent from this time in
2017.

“The November reading is consistent with reports from our builders, who say that the job market and
demographic tailwinds bode well for housing demand but rising interest rates and home prices are
forcing customers to take a pause,” said Randy Noel, chairman of the National Association of Home
Builders (NAHB) and a custom home builder from LaPlace, La. “Policymakers should see this drop in
sales as an indicator that housing affordability will continue to slow down the market.”

“Home sales declined this month as housing affordability continues to be a hurdle for consumers,” said
NAHB Senior Economist Danushka Nanayakkara-Skillington. “While a solid economy and positive
demographics support future demand for housing, it is critical to address this mounting affordability
crisis.”

A new home sale occurs when a sales contract is signed or a deposit is accepted. The home can be in any
stage of construction: not yet started, under construction or completed. In addition to adjusting for
seasonal effects, the October reading of 544,000 units is the number of homes that would sell if this
pace continued for the next 12 months.

The inventory of new homes for sale rose to 336,000 in October. The median sales price fell 3.6 percent
to $309,700, as the market is shifting to townhomes and other lower-cost houses.

Looking at the regional numbers on a year-to-date basis, new home sales rose 6.3 percent in the
Midwest, 4.1 percent in the West, and 3.8 percent in the South. Home sales fell 17.1 percent in the
Northeast year-to-date.

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