Sales of new single-family houses spiked in November, in part because of a significant downward revision of October’s totals, two federal agencies said today.
Sales were at a seasonally adjusted annual rate of 744,000 houses in November, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development (HUD). The annual rate was 82,000, or 12.4%, more than the October rate of 662,000, which was dramatically revised downward from the initial estimate of 745,000, the agencies said.
In addition, November’s rate is 14% below the November 2020 estimate of 865,000, but that total was aided at the time by the end of pandemic-related lockdowns and the recovery from the COVID-19 economic downturn.
The median sales price of new houses sold in November achieved a record high of $416,900, nearly 19% higher than a year earlier.
First American Deputy Chief Economist Odeta Kushi says the record-level of new-home prices may be pricing out some buyers.
“In November 2020, 33% of new-home sales were priced below $300,000,” Kushi noted. “A year later, in November 2021, only 14% of new-home sales were priced below $300,000. Demand for new homes remains strong, but construction costs and prices have increased.”
The seasonally adjusted estimate of new houses for sale at the end of November was 402,000, a supply of 6.5 months at the current sales rate, the agencies said.
Kushi noted that the share of completed homes sold in November was 22%, down from 25% a year earlier.
“Prior to the pandemic, completed homes made up the largest share of new homes sold. Today, it is homes under construction,” Kushi said. “The share of completed homes/ready-to-occupy inventory in November was 9.7%, down from 14.5% one year ago. While the share of new-home inventory that is not started increased from 22% to 27%.
“Borrowing costs remain low, demographic-fueled demand is strong and existing-home inventory remains near record lows, making a new home an attractive option,” she continued. “Yet higher construction costs (labor, lumber, materials) are being passed on to buyers, resulting in higher new-home prices.”
