New home sales increased 14% in September to a seasonally adjusted annual rate of 800,000, the U.S. Census Bureau reported. Compared with September 2020, however, new home sales fell 17.6%.
Despite the year-over-year drop, demand for new homes remained strong overall, according to the National Association of Home Builders.
"Limited existing inventory and low interest rates are keeping demand strong, and more potential buyers may be coming off the fence as they expect interest rates to rise in the future," NAHB Chairman Chuck Fowke said in a statement.
The median sales price of new homes sold in September was $408,800, an 18.7% jump compared with September 2020, according to NAHB. The average sales price was $451,700.
New home inventory was steady at a 5.7-month supply at the current sales pace, with 379,000 new homes for sale at the end of the month, up from 286,000 in September 2020.
Regionally, year-over-year new home sales increased 1.6% in the South, 1.9% in the Northeast and 3.4% in the Midwest. New home sales in the West fell 8.8% year-over-year.
