US new home sales slip as expected in September

Sales of new US single-family homes slipped as expected in September, according to data released by the Commerce Department on Thursday.

New home sales were down 0.7% from the previous month's revised level to a seasonally-adjusted annual rate of 701,000, in line with analysts' expectations. On the year, sales were up 15.5%.

Meanwhile, the median price of a new home was $299,400, down from $325,200 in August.

The figures also showed that the seasonally-adjusted estimate of new houses for sale at the end of September was 321,000. This represents a supply of 5.5 months at the current sales rate.

Ian Shepherdson, chief economist at Pantheon Macroeconomics, said the data was solid and new highs are likely over the next few months.

"This is the fourth straight month with sales running a bit higher than implied by the lagged mortgage applications data, but the overshoot is not large, given that the margin of error in the new home sales data is gigantic; it was +/-16% in September," he said.

"The bigger picture is clear enough; the trend in new home sales is rising, and the surge in mortgage purchase applications since the summer points to new cycle highs by the turn of the year, though a brief correction before then can’t be ruled out."