New Home Sales Surge in September Despite Rising Rates, But Prices and Builder Stocks Drop

U.S. new home sales surged 12.3% to an annual rate of 759,000 in September, the highest since February 2022.

The median sales price of a new home fell to $418,800 in September from $430,300 in August.

Sales rose sharply in the Northeast and Midwest, with the Northeast up 22.5%. Overall sales up 33.9% vs last year.

With low resale inventory, buyers are turning to new homes despite 8% mortgage rates. Builders may use incentives like rate buydowns.

Stocks down Wednesday amid higher rates. Shares of homebuilders like D.R. Horton and Lennar also down.