Report shows third quarter new home sales strong
Third-quarter new-home sales hit their highest level since 2021 despite a dropoff in September by recording the lowest monthly sales of the year while registering its highest monthly median price in history.
Las Vegas-based Home Builders Research reported 808 net sales in September — sales minus cancellations — four more than September 2023. It's slightly lower than historical averages for previous Septembers, according to HBR's President Andrew Smith.
The 2,707 sales for the third quarter edged the 2,654 in the third quarter of 2023 and 1,502 in the third quarter of 2022, when elevated mortgage rates stunted the market. There were 2,977 in the third quarter of 2021 and 3,165 in 2020.
Smith said the fourth quarter could see a slowdown after the 30-year fixed mortgage rates fell below 6 percent in mid-September following the Federal Reserve rate cut. It was hovering around 6 percent at the end of the month.
"Rates continuing to climb will not do anything to help boost the seasonally slower fourth quarter market," Smith said.
Builders reacted to that by taking out 870 permits in September, 17 percent lower than September 2023. For the year, the 10,043 permits taken out by builders is an 11 percent year-over-year increase from the first nine months of 2023. For the third quarter, there were 3,036 new home permits pulled, down 1 percent from the third quarter of 2023 with 3,061, Smith said.
Las Vegas builders opened 22 new communities during the third quarter totaling 1,858 lots, Smith said.
The market's leading homebuilder, Lennar, again led the way in September with 152 net sales and was the only builder to surpass 500 net sales in the third quarter at 546, Smith said.
KB Home's town home collection in the Inspirada master-planned community in west Henderson was the top-selling individual community in September with 16 net sales followed by Watercolor from Touchstone Living in North Las Vegas and Amigo Trails in Henderson from D.R. Horton, all of which feature attached product types, Smith said.
When it comes to closings, a lagging indicator compared with net sales, there were 1,028 closings in September, a 2 percent decrease compared with September 2023. For the year, the 9,204 closings total is 10 percent higher than the first nine months of 2023, and for the third quarter there were 3,211 new home closings, up 7 percent from the 3,007 in the third quarter of 2023.
Home Builders Research reported there were 769 single-family detached closings in September, 19 percent more than a year ago. The 2024 total through September is 6,812, some 9 percent higher than a year ago.
There were 259 attached sales in September, 14 percent fewer than a year ago. For the year, the 2,392 is 15 percent higher than 2023.
Smith said market share for attached new home products in September came in at 25 percent and is 26 percent for the year.
Home Builders Research reported the median new-home closing price for single family detached products was $550,000, up 8 percent from September 2023. For new attached product types, the median closing price was $393,990, 4 percent higher than September 2023.
Smith said those median closing prices were the highest Home Builders Research has ever reported.
New home market share of overall closings in September when including resale homes was 30.3 percent. The average monthly share for new home closings in 2024 is 8 percent higher through the third quarter.
