Senior economist sees positive signs ahead of spring buying season
Despite steady numbers month-over-month, new home sales saw a large annual increase in October, according to the latest report from the US Census Bureau and the Department of Housing and Urban Development.
Tuesday’s latest report showed that sales of single-family homes in October were at a seasonally adjusted annual rate of 737,000. This was an 18.7% increase over the October 2024 number of 621,000.
Month over month, it was a 0.1% decline from September’s total of 738,000.
Sam Williamson, a First American senior economist, said the data pointed to a modest shift in market momentum.
“Following a shutdown-related delay, new‑home sales beat expectations in October,” Williamson said. “After downward revisions to August, the September–October period now marks the strongest two‑month stretch since early 2022, as easing mortgage rates—paired with builder incentives and price flexibility—continued to draw buyers back into the market.”
Williamson said this data, combined with slowly improving builder confidence numbers, shows that things may be slowly improving.
“Although single-family builder sentiment remains subdued, the latest NAHB survey points to a cautiously improving outlook heading into 2026,” he said. “Sales expectations for the next six months have held above the 50-point expansion line for three consecutive readings, suggesting builders see firmer footing ahead.
“Builders also reported an uptick in buyer traffic, though the index is still just 26, indicating interest is returning only gradually. Still, with mortgage rates hovering near three-year lows, the data suggest rate-sensitive buyers are re-engaging as incremental affordability gains make the purchase calculus workable again.”
Sales prices mixed
Sales price figures were mixed: median prices were down, while average prices were up in October.
The median sales price of new houses sold in the month was $392,300. This was 3.3% down from September’s price of $405,800, and 8% down from the previous year’s median of $426,300.
Meanwhile, the average sales price in October was $498,000, up 3% from September’s price of $483,500. It was down from the previous year’s average of $521,900.
Largely stable prices, combined with declining mortgage rates, could set the stage for a strong spring buying season.
“If rates continue to drift modestly lower, the backdrop for the fast-approaching spring selling season could strengthen further—an encouraging sign of renewed buyer activity in a still-challenging market,” Williamson said.
Houses for sale steady
The seasonally adjusted estimate of new homes for sale at the end of October was 488,000, unchanged from September and 1.7% higher than the 480,000 for sale at the end of October 2024.
According to the report, this represents 7.9 months at the current sales rate, unchanged from September but down 15.1% from 9.3 months in October 2024.
The lack of housing supply is an issue in many parts of the country. The House is working on the Housing for the 21st Century Act in an effort to make the building process easier.
Kimber White, president of the National Association of Mortgage Brokers (NAMB), told Mortgage Professional America that he is hopeful that the new legislation will help.
“It's a good first step,” White said. “It addresses our housing supply challenges. Like I said to everyone, you can bring rates down and get better terms. But if you're not addressing the supply, you're not doing anything, because all you are going to do is artificially drive housing prices up.”
He noted that it’s not just about building more houses, but about ensuring some of them are affordable.
“We definitely need housing, but we need incentives for builders,” White said. “We need alternative programs. I think this starts addressing them. Whether it's the modular homes, whether it's the prefab homes, whether it's the container homes, it gives them incentives and streamlines some of the reviewing process that happens on the federal level.”
Some markets continue to have an abundance of inventory. Darshit Chokshi, president and CEO of Aequitas Mortgage, told Mortgage Professional America that he hasn’t seen the same inventory challenges in Texas.
“I don't think there is a lack of inventory at all,” he said. “Where I live, our subdivision is 886 homes. Three months back, our subdivision was lit up with listings. It was a lot more than usual from what I saw in the last three or four years. So that was a good sign.”
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