Sales of new single-family homes in September are up 4.1 percent to 738,000 at a seasonally adjusted annual rate after a small downward revision to 709,000 in August. The September level is above the consensus of 718,000 in the Econoday survey of forecasters. Sales are 6.3 percent higher than one year ago. The September level is the highest since 741,000 in May 2023. Sales rose 21.7 percent in the Northeast and 5.8 percent in the South, while sales are down 2.5 percent in the Midwest and unchanged in the West.

Sales of new single-family homes got a boost in September from a drop in mortgage rates to an 18-month low for a 30-year fixed rate mortgage. The Freddie Mac rate for a 30-year fixed rate mortgage bottomed at 6.08 percent as of the September 26 week, falling from 6.35 percent in the September 5 week. The last time rates were this low was 6.09 percent in the week of February 2, 2023. Potential homebuyers who could move quickly and lock in the favorable rate were willing to purchase new construction where existing inventory was not available.

The months' worth of homes for sale dips to 7.6 in September from 7.9 in August but slightly above 7.5 months in September 2023. The median price for a new single-family home is up 3.7 percent in September to $426,300 from $410,900 in August, but essentially unchanged from a year ago.

The need to act quickly before mortgage rate locks expired increased the share of total sales of homes not yet started to 16 percent in September to the largest share since 18 percent in January. The share of homes sold that are under construction rose to 38 percent in September, the largest since 38 percent in March and 44 percent in February. The share of completed homes is down to 47 percent in September from 53 percent in August. Homebuilders were not only able to move some existing inventory, but also able to get some work in the pipeline as well as secure sales for projects currently under construction.

New home sales for September are expected to increase to 718,000 after falling to 716,000 in August from July's 751,000.

New home sales measure the number of newly constructed homes with a committed sale during the month. The level of new home sales indicates housing market trends and, in turn, economic momentum and consumer purchases of furniture and appliances.

This provides a gauge of not only the demand for housing, but the economic momentum. People have to be feeling pretty comfortable and confident in their own financial position to buy a house. Furthermore, this narrow piece of data has a powerful multiplier effect through the economy, and therefore across the markets and your investments. By tracking economic data such as new home sales, investors can gain specific investment ideas as well as broad guidance for managing a portfolio. Each time the construction of a new home begins, it translates to more construction jobs, and income which will be pumped back into the economy. Once the home is sold, it generates revenues for the home builder and the realtor. It brings a myriad of consumption opportunities for the buyer. Refrigerators, washers, dryers and furniture are just a few items new home buyers might purchase. The economic"ripple effect" can be substantial especially when you think a hundred thousand new households around the country are doing this every month. Since the economic backdrop is the most pervasive influence on financial markets, new home sales have a direct bearing on stocks, bonds and commodities. In a more specific sense, trends in the new home sales data carry valuable clues for the stocks of home builders, mortgage lenders and home furnishings companies.