September new homes fell 5.5% to a 553K unit selling rate, quite a bit below expectations. August sales were revised down to a 585K unit selling rate from the initially released 629K selling rate. There were also downward revisions to June and July as well. The 2017 average selling rate of 616K was up 9.8% from the 2016 selling rate of 561K. To-date in 2018, the new home selling rate has averaged 623K, up 1.1% from the 2017 average. After averaging 561K in 2016, the new home selling rate shifted higher in 2017. However, month to month swings were very choppy, especially over the second half of the year when the hurricanes in the South and the wildfires in California caused simultaneous demand and supply shocks in the housing market. Post-disaster replacement sales led to a spike in November to the cycle-high selling rate of 712K and we have seen a correction back towards trend in the ensuing months. Note, Housing data since late 2017 has been less robust for three reasons: 1) A return toward trend form the unsustainably high readings following the boost form the natural disasters; 2) An adjustment of the housing sector to the change in SALT deductions in 2017 tax bill ; and 3) An adjustment to the return of affordability measures to the historical norm after being unusually attractive for most of the cycle.
Locally, many price reductions and many indications that market is rebalancing to less of a sellers' market. Good news for buyers! Interest rates should continue upward march so this is a good time to make an offer!
Source: Jefferies, Inc.