New Home Sales Grew in December

(Image courtesy of U.S. Census Bureau; Breakout image courtesy of Ksenia Chernaya/pexels.com)

Per the U.S. Census Bureau and U.S. Department of Housing and Urban Development, sales of new single-family homes in December hit a seasonally adjusted annual rate of 664,000.

That’s 8% above the revised November rate of 615,000, and up 4.4% year-over-year.

The median sales price of a new house sold in the month was $413,200, and the average sales price was $487,300.

“The median sale price for a new home decreased 3% compared with November, and has fallen nearly 14% compared with one year ago. Prices for new homes have come down from recent peaks, but remain significantly higher compared with pre-pandemic new-home prices,” said First American Deputy Chief Economist Odeta Kushi.

“The price declines may be partially the result of builder price cuts to entice buyers, but it also signals that the ‘mix’ of new homes being sold may have shifted,” she continued. “The median price for a new home peaked in October 2022 at approximately $497,000. In that same month, 33% of new homes sold were priced below $400,000. The median sale price of a new home in December 2023 was $413,000, and 47% of homes sold were priced below $400,000.”

The seasonally adjusted estimate of new homes for sale at the end of December was 453,000, which equals a supply of 8.2 months at the current sales rate.

“We are likely to see a soft but steady rebound in home sales which reflect pent up demand and optimism that has built over expectations of lower mortgage rates. Builder surveys also show cautious optimism as we enter the new year,” said Selma Hepp, chief economist from CoreLogic. “Permits are also up which will provide some relief in supply and will help keep home sales going if interest rates continue their downward trend throughout 2024, as expected. However, home affordability will not improve greatly this year as prices continue to rise and mortgage rate decline remains marginal.”