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In our effort to cover important trends that affect the mortgage market, the FREEandCLEAR keeps a close eye on new home sales, which is the number of newly constructed housing units that are sold in a month. The new home sales figure is reported separately from the existing home sales figure, which is the number of previously constructed homes that are sold in a month. The new home sales market is smaller than the existing home sales market but it is still an important indicator for the real estate and mortgage markets. In addition to reporting the number of housing units sold, the new home sales report also includes information on the supply of units for sale as wells as the median and average new home sales price.
The new home sales report, issued on a monthly basis, includes statistics for the prior month. The report for October 2014 showed that new home sales in September increased slightly to an annualized 467,000 units as compared to the revised 466,000 units figure for for August. The September new home sales figure represents one of the strongest reports since the housing crisis in 2008. The number of new homes available for sale, known as supply, increased slightly from 204,000 units in August to 207,000 units in September. The strong new home sales figure is partially attributable to a decline in housing prices as the median new home sales price decreased 9.7% on a month-over-month basis to $259,000. The September new home sales figure exceeded industry expectations as buyers continue to be attracted by flattening house prices and relatively attractive interest rates. (Source: Bloomberg)
What it Means for Mortgage Borrowers
Falling new home sales prices and falling interest rates creates an attractive dynamic for home buyers. The October new home sales report coupled with the October existing home sales report shows that home buyers are slowly moving back into the home purchase market. If you have been considering buying a home but reluctant to enter the market due to high housing prices or interest rates, now may be a good time to start your home search. Housing prices appear to be moderating (although housing prices vary considerably by market) and lower interest rates mean you can afford a larger mortgage and get more house for your money. Use the FREEandCLEAR Mortgage Qualification Calculator to determine what size mortgage you can afford and review the COMPARE LENDERS feature on FREEandCLEAR to keep tabs on interest rates for lenders in your area.
The FREEandCLEAR Mortgage Expert