released earlier today from the US Census Bureau and the Department of Housing and Urban Development.<\/span><\/p>\nAn estimated 278,000 newly-completed homes hit the market in October on a seasonally-adjusted basis, far fewer than the total number of sales. Doug Duncan, Chief Economist at Fannie Mae, explains that this is due to robust pre-sales, or contracts signed before the start of construction.<\/p>\n
\u201c<\/span>The share of homes sold but not yet started rose for the third straight month and now represents the highest share of total sales since 2005, while the number of fully-completed homes sold hit the lowest level since the COVID-19-related shutdowns this past April,\u201d said Duncan.\u00a0<\/span><\/p>\nHome sales have plateaued over the last three months, however, the rate at which they\u2019re coasting (around 1 million annualized units) has \u201cnot been seen since 2006,\u201d noted Duncan.<\/p>\n
This brisk pace is unlikely to be sustained due to the lack of under-construction homes available. Projects that have yet to break ground may be less appealing to homeowners seeking to offload their current property in 2020\u2019s highly-competitive market.<\/span><\/p>\n\u201cWe continue to project a convergence in coming months via a softening of sales while housing starts show comparative strength,\u201d said Duncan.<\/p>\n
New single-family home inventory dwindled further, amounting to 3.3 months of supply at the current sales rate, down from 3.6 months of supply in September. This caused the median sales price to increase 4.3 percent year-over-year to $330,600 \u2014 a $3,800 price hike over the previous month.<\/p>\n
While rising new home prices might give some buyers sticker shock, <\/span>record-low mortgage interest rates<\/span><\/a> could help to keep monthly payments affordable.<\/span><\/p>\n
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