New home sales post unexpected increase as prices fall to lowest level in 4 years
Sales of new homes unexpectedly rose last month, as many homebuyers seized on builder discounts and rushed to take advantage of expiring down payment assistance programs and other incentives.
Economists had expected sales of new, single-family homes to drop from August levels, but instead they rose 2.7 percent in September to a seasonally adjusted annual rate of 464,000 homes, the Commerce Department reported Monday.
Many homebuilders had ramped up incentives in August and September to capitalize on the end of seller-funded down payment assistance programs on Oct. 1. Builders also likely benefited from another factor motivating homebuilders: an increase from 3 percent to 3.5 percent in the down payment required to qualify for a Federal Housing Administration-insured loan, which also took effect Oct. 1.
Builders' discounts helped push down the median price of a new home to $218,400, or 9.1 percent below what it was a year ago. That means prices have rolled back to what they were four years ago.
Comments(0)