New Home Sales Post Modest November Increase
November sales of new single‐family houses rose by 1.3 percent from October and by nearly 17 percent from a year ago, HUD and the Census Bureau reported yesterday.
The report said November new home sales came in at a seasonally adjusted annual rate of 719,000, 1.3 percent higher than October’s revised 710,000 and 16.9 percent higher than a year ago (615,000).
Regionally, results were mixed and most of November’s increase occurred in the West, where sales jumped by 7.5 percent to 216,000 units, seasonally annually adjusted, in November from 201,000 units in October and improved by 48 percent from a year ago. In the Northeast, sales soared by 52.4 percent in November, to 32,000 units from 21,000 in October, and improved by 6.7 percent from a year ago.
In the largest region, the South, sales fell by 4.1 percent in November to 400,000 units, seasonally annually adjusted, from 417,000 units in October, but improved by 9 percent from a year ago. In the Midwest, November sales were unchanged at 71,000 units and fell by 1.4 percent from a year ago.
The report said the median sales price of new houses sold in November rose to $330,800; the average sales price rose to $388,200. The seasonally adjusted estimate of new houses for sale at the end of November was 323,000. This represents a
supply of 5.4 months at the current sales rate.
Mark Vitner, Senior Economist with Wells Fargo Securities, Charlotte, N.C., said home builders are focusing more on entry-level housing, which is why the median prices has risen so modestly this year.
“Although this level of sales was not quite as strong as expected, strength in the NAHB/Wells Fargo Homebuilders Survey suggests that the upward trend in sales remains intact,” Vitner said. “New home sales have risen the most in South and West. The two regions account for roughly 85% of new home sales. Builders are increasingly building in more affordable parts of both regions.”
Vitner noted housing demand also appears to have strengthened. “Home builder confidence has risen to its highest level since 1998,” he said.