Sales of new homes unexpectedly rose last month, as many homebuyers seized on builder discounts and rushed to take advantage of expiring down-payment assistance programs and other incentives.
Economists expected sales of new, single-family homes to drop from August levels, but instead they rose 2.7 percent in September to a seasonally adjusted annual rate of 464,000 homes, the Commerce Department reported Monday.
Many homebuilders had ramped up incentives in August and September to capitalize on the end of seller-funded down-payment assistance programs on Oct. 1. Builders also likely benefited from another factor: an increase from 3 percent to 3.5 percent in the down payment required to qualify for a Federal Housing Administration-insured loan, which also took effect Oct. 1.
Builders’ discounts helped push down the median price of a new home to $218,400, or 9.1 percent below what it was a year ago. That means prices have rolled back to what they were four years ago.