Sales of new single-family home sales surged 12.3% between August and September, climbing to an annual rate of 759,000 as buyers bit the bullet and purchased newly built houses despite stubbornly high interest rates.  

Sales were up 33.9% compared to a year ago, according to the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.    

The median price of a new home sold during the month fell to $418,800 from $433,100 in August. Year over year, the median price was down from $477,700 in September 2022.   

“Even though mortgage rates surpassed 7% in September and continued their upward climb, new homes remain one of the only available options because of the significantly constrained resale inventory,” RCLCO Real Estate Consulting Kelly Mangold said. “The constraints in the housing market have created a significant amount of pent-up demand, as more and more households are living in homes they may have outgrown and are deciding to buy despite current market conditions.” 

By region, the pace of new-home sales was up across the country, with monthly increases of 22.5%, 4.7%, 14.6% and 7.5% in the Northeast, Midwest, South and West, respectively.       

Months’ supply of new homes for sale fell 10.4% to 6.9 months from 7.7 months in August; on a year-over-year basis, inventory was down 28.9% from a 9.7-month supply in September 2022.