Newly built single-family home sales dropped to a seasonally adjusted annual rate of 553,000 units according the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The National Association of Home Builders (NAHB) reports this is the lowest sales pace since December 2016. Although based on a year-to-date basis, single-family sales are up 3.5 percent from this time last year.

“New home sales activity has slowed this summer as housing affordability remains a serious issue,” says Randy Noel, chairman of the NAHB. “However, sales are up from this time last year and builders continue to report consumer interest in housing.”

The reading of 553,000 units accounts for the amount of homes that would sell if these numbers remained the same for the next 12 months. The inventory of new single-family homes for sale in September was 327,000 with the median sales price being $320,000. The median price is down from this time last year, which was $331,500.

Regionally, new home sales are up 6.9 percent in the Midwest. Sales are down 1.5 percent in the south, 12 percent in the west and 40.6 percent in the northeast. From this time last year, home sales are higher across the country except in the northeast, which reports a 16.5 percent drop in sales.

“Home price gains and rising interest rates are slowing down the housing market, particularly in high-cost areas and among entry-level buyers who are sensitive to price increases,” says NAHB chief economist Robert Dietz. “Builders need to provide homes at different price points to address these affordability concerns. Meanwhile, overall job and economic growth should help support the housing market in the months ahead as it adjusts to higher mortgage interest rates.”

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