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.
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