New home sales hit new high as prices drop
According to recent data, new home sales hit a 19-month high in September as they surged by 12.3%. Not only did sales pick up the pace, but the median price for a new home dropped by 12.3% to $418,000. The majority of new home sales in September 2023 were in the $150,000 to $499,999 range.
Low inventory for existing homes continues to keep home prices elevated, but several new home projects that we kicked off in the Spring and Summer are starting to hit the market.
Bill Adams, chief economist at Comerica Bank in Dallas said, “Homebuilders are offering buyers interest rate buydown incentives that funnel demand into the newly built segment. They are also shrinking floorplans to boost affordability. That is leading to very different dynamics in different parts of the housing market.”
Adjustable-rate mortgage demand hits a one-year high
A recent report from the Mortgage Banker’s Association showed that while mortgage applications continue to drop, adjustable-rate mortgages are gaining in popularity. The total demand for ARMs hit 9.5% of the market the past week.
ARMs typically have a set rate for a period of several years, and then adjust based on market levels once the initial period is over. If mortgage rates head lower, homebuyers may be able to save over time, but there are no guarantees that will occur.
Where is the top emerging housing market in the U.S.?
A recent list of emerging housing markets was released by WSJ/Realtor.com. The top emerging market on the list? Topeka, KS claimed the top spot for the first time ever.
The emerging markets index measures local market data, economic vitality, and quality of life factors to determine markets that could gain in popularity. Markets that make the list are predicted to show growth in the next year.
Analysts highlighted Topeka’s affordability, strong jobs market, and convenient commutes.
The Midwest region was well-represented on the list with Elkhart-Goshen, IN and Oshkosh-Neenah, WI taking the second and third spots.
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