New-home sales remained sky-high in historical terms in October as properties changed hands at a seasonally adjusted annual rate 41.5% above the year-earlier level, according to government data.
Sales slipped 0.3% to an annual rate of 999,000 from a revised September rate of 1,002,000, according to figures the Census Bureau and the Department of Housing and Urban Development released on Wednesday. The consensus call among Wall Street economists was for sales of 972,500.
The last time the October rate exceeded 999,000 was in 2005, before the 2008-2009 financial crisis, according to historical data. Year to date, new home sales are 20.6% higher than last year, according to the data.
Demand for a home has far outstripped supply. While new-home sales are high, the number of homes coming on the market each month is still low. At the current sales pace, the seasonally-adjusted supply of new homes for sale at the end of October would be extinguished in 3.3 months, tied with September for the quickest pace on record.
The new-home sales figures include housing that hasn’t been started and homes that haven’t been finished, as well as completed properties. Only 44,000 homes ready for occupants were on the market at the end of October. At the current sales rate, that is equivalent to a bit more than two weeks of sales, according to Michael Shaoul of Marketfield Asset Management, who covered the data in an email to clients.
That is “a level unseen in the history of the data pre-Covid,” Shaoul wrote. As demand has surged, “builders have been unable to respond,” he said.
Investors in home-building stocks appeared largely unmoved. Two exchange-traded funds that track home builders, the
SPDR S&P Homebuilders ETF
(ticker: XHB) and the
iShares U.S. Home Construction ETF
(ITB), were both trading about flat Wednesday. The
index was down 0.2%, and the
Dow Jones Industrial Average
had fallen 0.5%.