The U.S. logged vigorous growth in new home sales in October, boosted in part by high-end construction.
It was the second straight month of robust growth, with new home sales jumping 18.7% from a year earlier to a seasonally adjusted annual rate of 685,000, according to the Commerce Department. Since this time last year, sales of new homes priced at $750,000 or more increased fourfold to an estimated 4,000 in October.
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The average price of a newly constructed home in the U.S. spiked to $400,000 in October, thanks to more sales at the highest segment of the market. Last month, $750,000-plus homes made up 7% of sales, the greatest proportion in a year.
In October 2016, homes that expensive made up only 3% of sales.
The upswing in sales and price signal tightening inventory around the country. At the end of October, there was a 4.9-month supply of new homes on the market, the lowest supply all year, according to the report.
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Sales of newly constructed homes have increased gradually since late 2013, when the U.S. housing market began to recover from the recession. But recent months have seen a sudden jump in sales.
The Northeast, in particular, is driving the uptick. From September to October new home sales jumped 30% in the corridor from Maine to Pennsylvania. Since this time last year, sales in the region have increased nearly 65%.