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CHART OF THE DAY: New home sales cool as inventory remains limited

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New single-family home sales dropped 3.5% from August to September as the robust market began to cool heading into the fall months, the Commerce Department reported on Monday. The decline was expected after the heightened pace of sales over the summer, with many urban renters fleeing to the suburban market and existing home inventory at record lows. Even with a drop in September, new home sales, bolstered by historically low mortgage rates, topped 959,000, up 32% from a year ago.

The increased demand has depleted homebuilder inventory, which sits at 284,000 new homes through September. This inventory may stay low as homebuilders look to moderate pricing as a hedge against volatile costs.

For more information on how the coronavirus is affecting midsize businesses, please visit the RSM Coronavirus Resource Center.

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About Troy Merkel

@troymerkel

Troy Merkel is a Partner and Real Estate Senior Analyst at RSM. He has 15 years of experience in audit and consulting, with a particular emphasis in real estate and financial services reporting, in accordance with US GAAP, IFRS, NCREIF PREA Reporting Standards and income tax basis. He is also an expert in accounting for asset acquisitions and complex leases and specializes in various tax-advantageous, in particular Opportunity Zones and government subsidized deal structures.

In 2018, Troy was selected as a senior analyst in RSM’s cutting edge Industry Eminence Program, which positions its senior analysts to understand, forecast and communicate economic, business and technology trends shaping the industries RSM serves. These senior analysts advise clients on conditions impacting middle market leaders. Troy’s focus is on the real estate industry.

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