September 2024’s new home sales were remarkably strong when compared to the reported a month earlier.The U.S. Census Bureau’s initial estimate of the annualized number of sales in September 2024 was 738,000. If that number holds, that would be the second highest figure reported since February 2022’s finalized estimate of 773,000 new homes sold. The next month, new home sales plunged as the Federal Reserve began a series of rate hikes, which forced mortgage rates to rise.In reporting September 2024’s numbers, Reuters the increase in sales to a decline in mortgage rates during the month as the Federal Reserve acted to cut interest rates for the .The three following charts track the trends for the U.S. new home , the , and their as measured by their time-shifted, trailing twelve month averages from January 1976 through September 2024.New home sales trending up:Prices on slow downtrend, but elevated:September 2024’s initial estimate of the market cap for the U.S. new home market is $30.59 billion, which is less than the initial estimate of $31.06 billion for August. However, both August 2024’s number of estimated sales and the average sale price of new homes sold was revised lower, pushing that month’s estimated market capitalization for the U.S. new home market down to $30.46 billion.We suspect October 2024’s numbers are going to look quite different. That’s because mortgage rates have rebounded during the last several weeks, a large portion of the reduction in interest rates that boosted sales in September.That may be quite a headwind for the U.S. new home market. We’ll find out more in a month.ReferencesU.S. Census Bureau. New Residential Sales Historical Data. Houses Sold. []. Accessed 24 October 2024. U.S. Census Bureau. New Residential Sales Historical Data. Median and Average Sale Price of Houses Sold. []. Accessed 24 October 2024. More By This Author:How Much Should You Save For Your Emergency Fund S&P 500 Retreats As Bearish Change In Interest Rates Scares Bulls Forty Years Of Trends In American Consumer Spending
New Home Sales Rise As Mortgage Rates Fall In September 2024, But Headwinds Build In October
