New home sales in the South dropped to their lowest level in two years in October, according to a joint report from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.
- New home sales fell to a seasonally adjusted annual rate of 339,000, marking a steep 27.7% decline from September and the lowest rate since September 2022.
- Despite the drop, the South still makes up 55.6% of all new home sales across the country.
Impact: The downturn in the South, which accounts for more than half of all new home sales nationwide, dragged the national index down by 17% for the month. The West also saw a significant 9% decline in new home sales in October.
- In contrast, the Midwest experienced a modest 1.4% increase, while the Northeast posted a striking 53% surge during the same period.
Supply: The slowdown in sales pushed up the inventory of new homes on the market. The seasonally adjusted estimate of houses for sale at the end of October rose to 481,000, representing a 9.5-month supply at the current sales pace. This is a jump from the 7.6-month supply reported in September and the highest level since October 2022.
Bottom Line: Even with builders offering incentives to entice buyers, higher mortgage rates continue to weigh heavily on affordability, making it more challenging for families to purchase new homes.
