New home sales take step back as rate increases impact buyers

“Builders continue to face lower buyer traffic due to declining affordability conditions as the housing downturn continues,” said Jerry Konter, chairman of the National Association of Home Builders (NAHB). “Builder sentiment has declined for 10 consecutive months. The entry-level market in high-cost areas has been particularly affected, with growing numbers of first-time and first-generation buyers priced out of the market.”

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Reflecting rising construction costs, the median sales price of new homes sold in September was $470,600 (up 13.9% from a year ago), and the average sales price was $517,700.

“However, NAHB surveys indicate that a quarter of builders are now cutting prices. Thus recent months’ price data reflects a composition change, with sales lost at the low end of the market pushing the median price higher,” the association said in a statement. “In September 2022, there were 20,000 sales priced below $300,000. In September 2021, sales in this price range totaled only 6,000.”