New Home Sales Down Again

For the third consecutive month, new home sales were in decline, according to data from the U.S. Census Bureau and the U.S. Department of Housing & Urban Development (HUD).

 

Sales of new single-family houses in December were at a seasonally-adjusted annual rate of 694,000, a 0.4 percent drop from the revised November rate of 697,000. However, sales were also 23 percent above the December 2018 estimate of 564,000.

 

An estimated 681,000 new homes were sold in 2019, which is 10.3 percent above the 2018 figure of 617,000. The median sales price of new houses sold in December was $331,400, while the average sales price was $384,500. The seasonally-adjusted estimate of new houses for sale at the end of December was 327,000, which represented a supply of 5.7 month at the current sales rate.

 

Separately, First American Financial Corp. released data that found real house prices increased 1.2 percent between October and November, but declined by 8.1 percent between November 2018 and November 2019. No states recorded a year-over-year increase, while the greatest annual decreases were found in New Mexico (-12.9 percent), California (-12.2 percent), Utah (-11.9 percent), Nebraska (-11.5 percent) and Mississippi (-11.4 percent).

 

“Once again, homebuyers benefitted from a year-over-year affordability boost as two of the three key drivers of the Real House Price Index, household income and mortgage rates, swung in favor of increased affordability in November,” said Mark Fleming, chief economist at First American. “Compared with November 2018, the 30-year, fixed-rate mortgage fell by 1.2 percentage points and household income increased 2.6 percent. Both trends, rising household income and declining mortgage rates, boost consumer house-buying power. However, increased housebuying power also drives demand, and rising demand in a supply constrained market results in faster nominal house price appreciation.”

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