New home sales sprang back to life in September, according to newly released data from the U.S. Census Bureau and the Department of Housing and Urban Development.
Sales rose by 12.3% from August to a seasonally adjusted annual rate of 759,000. This is well above the rate of 680,000 units predicted by economists.
The median price for a new home was $418,800, while the average sales price was $503,900, both down.
But the increase may not hold over as the end of the year approaches, bringing with it historically lower-volume months.
“While the overall number of potential homebuyers is down, ‘patience’ seems to be the mantra for those still in the market, and lenders would do well to follow suit, as industry analysts have revised their forecasts to reflect a tough Q4 and Q1,” Patrick O’Brien, CEO of LenderLogix, noted.
LenderLogix’s Q3 2023 Homebuyer Intelligence Report found significantly fewer shoppers on the market compared to Q2 as prices and rates soared.
While many Americans would prefer to wait out high rates before purchasing a home, plenty are forced to enter the market by the typical changes of life.
One in ten home sellers listed their house, in part, because they’ve been called back to the office, for example. Those sellers are also buyers who have to find a new home or risk their job regardless of where affordability stands.
“Though there may be fewer buyers and the road to purchase longer than anyone would like, there is still business out there for lenders to capture,” O’Brien said.
Forward-thinking buyers may even find current conditions preferable to an explosive, low-rate environment.
“It’s probably a better time to buy down than waiting for mortgage rates to drop, because once that happens, competition will escalate and prices will shoot up,” Carmen Gioia, a Redfin agent in Austin, TX, said. “Right now, buyers are able to take their sweet time, negotiate with sellers, and buy a home without getting into a wild bidding war.”
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