New single-family home sales increased for the second month in a row in November, rising 5.8% month over month to an annual rate of 640,000, while the median price of a new home sold during the month fell from an all-time high set in October, the U.S. Census Bureau and the U.S. Department of Housing and Urban Development reported.
Year over year, the pace of newly built home sales in November was down 15.3% from the year-ago rate of 756,000.
“November can traditionally be a time of slower sales due to the beginning of the holiday season, so it is promising that this year we are seeing sales activity increase,” RCLCO Real Estate Consulting principal Kelly Mangold said. “The combination of high mortgage rates and economic uncertainty is still causing some hesitation among buyers, but an increase in sales is a positive indicator.”
The median sales price of a new house sold last month slid 2.8% to $471,200 from $484,700 in October; it was up 9.5% from the year-ago price of $430,300.
First American Deputy Chief Economist Odeta Kushi cautioned that the market for new homes remains uncertain.
“Builder sentiment and permit data indicate ongoing weakness in the new-home market,” she said. “With higher mortgage rates and greater economic uncertainty, new-home prices will need to continue to adjust to entice more buyers.”
By region, the pace of new-construction home sales was mixed, with monthly gains of 27.6% and 21.3% in the West and Midwest, respectively, and declines of 8.5% and 2.1% in the Northeast and South, respectively.
Months’ supply of homes for sale fell to 8.6 months from 9.3 months in October; in November 2021, there was a 6.2 months’ supply of homes.
New home sales rise
New-home sales rose 1.2% on a monthly basis in August to a seasonally adjusted, annual rate of 740,000, while the median sales price was roughly flat at $390,900, the U.S. Census Bureau and the Department of Housing and Urban Development reported.
The seasonally adjusted estimate of new houses for sale at the end of August was 378,000, representing a supply of 6.1 months at the current sales rate.
“Demand for new homes remains strong as household formation continues to grow, and purchasing power is buoyed by historically low mortgage rates,” First American Deputy Chief Economist Odeta Kushi said. “The lack of existing homes for sale nationwide to meet this demand provides fertile ground for new construction to accelerate.”
By region, the number of new homes sold in the Midwest plunged 31.1% month over month to 51,000 on an adjusted basis, while they were up 26.1% in the Northeast at 29,000, up 6% in the South at 445,000, and up 1.4% in the West at 215,000.
Kushi noted that by stage of construction, the share of completed homes sold was at its lowest point since 2005 in August, thanks to supply-chain disruptions, rising materials costs, delays, and shortages of lots and labor.
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