- New single-family home sales fell 0.6% in September to an annualized 676,000, down from roughly 680,000 in August (Lumida calculation). The pace still beat the 651,000 median estimate by about 25,000 (Lumida calculation).
- The median sales price fell 3.9% from a year earlier to $400,400, the seventh of nine months in 2026 with a year-over-year decline. Inventory dropped 2.3% to 476,000 homes, equal to 8.4 months of supply, the lowest this year but still well above pre-pandemic levels.
- Mortgage rates rose about half a point in September, reaching the highest level in almost three years in early October, and have eased only slightly since. The surge has hurt demand and pushed homebuilder confidence to a 14-year low.
- Sales in the South, the biggest region, fell 6.6% to an annualized 413,000, and the Midwest also declined, offsetting gains in the West and Northeast. Bloomberg Intelligence said entry-level builders such as D.R. Horton and Meritage Homes are more exposed to rising financing costs.
What Happened?
Sales of new homes in the US edged lower in September, according to government figures released Tuesday, as price cuts and incentives failed to fully offset higher mortgage rates. Sales fell 0.6% to an annualized 676,000, while the median price fell to $400,400. Builders are offering smaller homes and subsidized mortgage rates to keep buyers engaged. The data are volatile, with 90% confidence that the monthly change ranged from a 14.4% decline to a 13.2% gain.
Why It Matters?
The report shows the housing market is being held up by builder concessions, not demand. “The market remains supported more by builder concessions than by strong underlying demand,” Nationwide economist Daniel Vielhaber said. Falling prices and incentives squeeze builder margins, and the weakness adds to evidence that higher rates are cooling a rate-sensitive part of the economy.
What’s Next?
Vielhaber expects higher mortgage rates to keep selling conditions challenging at least through year-end. Investors will watch the Fed decision and Treasury yields, which drive mortgage rates, as well as upcoming builder earnings for signs of margin pressure. Any easing in rates would test whether pent-up demand returns.
Affected Tickers and Coins: DHI, MTH, ITB
Source: Bloomberg
