New Home Sales, which measure signed contracts on new homes, fell 5.6% from September to October to a 679,000-unit annualized pace. While elevated mortgage rates impacted activity last month, October’s signed contracts are still respectable numbers, as they were 15,000 higher than they were in August and 102,000 higher than in October of last year. 

What’s the bottom line? There were 439,000 new homes available for sale at the end of October. While this is a slight uptick from September, more “available” supply is still needed to meet demand as only 76,000 of these homes were actually completed, with the rest either under construction or not even started yet.

In addition, the median sales price for new homes was $409,300, which was down on both a monthly and yearly basis. While some media reports suggested this means home prices are declining, that’s actually not the case.

The median home price represents the mid-price and can be skewed by the mix of sales among lower-priced and higher-priced homes. With builders creating more lower-priced, starter homes to meet demand, NAHB Chief Economist Robert Dietz explained that “median new home prices have moved lower as new home size has decreased in 2023.”

The top five appreciation indexes in the country actually show that home prices nationwide continue to hit record highs, as detailed below.