November New Home Sales Post Healthy Increase

New single-family home sales rose by 5.2 percent in November, HUD and the Census Bureau reported last week.

Sales came in at a seasonally adjusted annual rate of 592,000, 5.2 percent above the revised October rate of 563,000 and 16.5 percent higher than a year ago (508,000).

Regionally, sales fell in the important South, which saw a 3.1 percent decline to 313,000 units, seasonally adjusted, from 323,000 in October but improved by 13.4 percent from a year ago. In the Northeast, sales were unchanged at 33,000 in November but improved by 22.2 percent from a year ago. In the West, sales rose by 7.7 percent to 154,000 units in November from 143,000 in October and improved by nearly 11 percent from a year ago. in the Midwest sales jumped by 43.8 percent to 92,000 units in November from 64,000 in October and improved by 39.4 percent from a year ago.

Mark Vitner, senior economist with Wells Fargo Securities, Charlotte, N.C., said sales were likely bolstered by unusually mild weather, particularly in the Midwest, where most of November’s gain occurred. He noted gains in home completions helped boost sales.

“Both new and existing home sales have been held back by a lack of inventory,” Vitner said. “Builders have had a tough time securing the affordable lots and the workers needed to boost supply. Construction has ramped up over the past year, however, and the dry fall weather has boosted completions and inventories.”

HUD/Census reported the median sales price of new houses sold in November rose slightly to $305,400; the average sales price rose to $359,900. The seasonally adjusted estimate of new houses for sale at the end of November grew to 250,000, representing a 5.1 month supply at the current sales rate.