Some days, newspaper headlines are a terrible place to get your real estate news. Today is one of those days. After the September New Home Sales report showed sales volume down from August, the mainstream media jumped on the story:
- New Home Sales fall a surprising 3.6%
- Surprise Drop In New Home Sales
- Stocks slide as New Home Sales fall
But the headlines miss the point, somewhat. Yes, home sales volume is important to housing, but it’s not as important as home supply. A deeper look at the New Home Sales data reveals an interesting comparison point:
- New home sales volume fell 3.6%
- The number of new homes available for sale fell 3.8%
In other words, sales outpaced supply — a running theme this year and a positive signal for housing. Since peaking in January 2009, the supply of newly-built homes has now dropped by 40 percent. The average sale price is up 15% over the same period. This is why you can’t get your real estate news from the headlines. You have to dig a little bit deeper to get the real story. September’s New Home Sales report was plenty strong. The housing market recovery continues.
