Washington – The number of purchases of newly built homes in the U.S. fell to its lowest record since November 2014.
The Commerce Department recorded on Monday an 11% decrease in new single-family homes purchases for September, breaking up with the two-month straight gains hitting the industry so far. Economists surveyed by The Wall Street Journal had expected a figure of 555,000 when in reality data announced a seasonally adjusted rate of 468,000.
Working with a limited inventory of affordable homes and viable lots on which to build them may be the reason behind the decline in the industry. However, despite the inconvenient September’s pace of newly built home sales is up 2% from September a year ago. Builders are feeling uncertain about fundamental support matters that are needed of clear terms before investing in additional land and labor, matters such as job growth and cheap borrowing costs.
“We assume credit availability remains a major problem for the market […] we see a broad, slow but positive growth pace for the housing sector.” said Mike Englund, chief economist at Action Economics in Boulder to Bloomberg.
Despite the decrease, additional data like the supply of homes and purchases of existing homes are making homebuilders more confident about the outlook, additional to the National Association of Home Builders Wells Fargo sentiment gauge climbing in October to a 10-year high. That optimism is helping drive construction, as the figures of the Commerce Department showed last week that housing started rising 6.5 percent to a 1.21 million annualized rate last month, the second-highest level in eight years.
Additional improvement in the market is needed for the Federal Reserve policy makers to take the economy’s health into consideration as they try to time their first interest rate increase since 2006 and help support the world’s largest economy at a time when a slowdown in international growth threatens to throttle domestic momentum.