The latest figures, backed by data from Zonda and Metrostudy, show that lower mortgage rates and increased consumer confidence are driving home sales even into traditionally slower months for housing.
The Index shows a 119.0 for October, representing a 14.5% increase from October 2018. On a month-over-month basis, new home sales increased by 0.2% between September and October 2019.
Markets Driving The Increase In New Home Pending Sales
Seattle, Phoenix, and Dallas experienced the most significant growth compared to last year, up 36.2%, 31.1%, and 24.0%, respectively.
Phoenix is at a cycle-high for October, capturing the momentum in a market that was slow to recover from the Great Recession.
Data revealed that the new home sales growth rate in Los Angeles moved in a positive direction for the first time since February of 2018.
“The US housing market regained momentum this year after a tough close to 2018,” said Ali Wolf, director of economic research at Meyers Research. “October’s new home sales capture stronger demand as lower mortgage rates, softer home price appreciation, and positive wage trends favor buyers.”
The Meyers Research New Home Pending Sales Index (PSI) is built on proprietary, industry-leading data that covers 60% of the production new home market across the United States. Reported number of new home pending contracts are gathered and analyzed each month. Released on the 15th business day of each month, the New Home PSI is a leading indicator of housing demand compared to closings because it is based on the number of signed contracts at a new home community. Meyers Research monitors 18,000 active communities in the country and the homes tracked can be in any stage of construction.
The New Home PSI is susceptible to outsized swings in contract activity based on shifts in the number of actively selling communities. As a result, Meyers Research normalizes the data to ensure consistency across the index. The New Home PSI blends the cumulative sales of active or recently sold-out projects with the average sales rate per community, which adjusts for fluctuations in supply. Furthermore, the New Home PSI is seasonally adjusted based on each markets’ specific seasonality, removes outliers, and uses June 2016 as the base month.
The data provided in this release are for use only by the primary recipient or the primary recipient’s publication or broadcast. This data may not be modified, resold, republished or licensed to any other source, including publications and sources owned by the primary recipient’s parent company without prior written permission from Meyers Research.