Sales of newly built, single-family homes declined 0.4 percent to a seasonally adjusted annual rate of 694,000 units in December. This comes off a downward revision in November, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The monthly number is 23 percent higher than the December 2018 pace. An estimated 681,000 new homes were sold in 2019, 10.3 percent higher than in 2018.
“High levels of home builder confidence, coupled with an insufficient existing housing supply to meet current demand, suggest growth ahead for new home sales this year.” said NAHB Chairman Dean Mon, a home builder and developer from Shrewsbury, N.J.
“Despite the slow start for housing in 2019, lower mortgage interest rates accelerated new home sales during the second half of the year, marking it as the best year for new home sales since the recession.” said NAHB Chief Economist Robert Dietz.
Inventory Trends Downwards
A new home sale occurs when a sales contract is signed or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. After adjusting for seasonal effects, if this pace continued for the next 12 months, the December reading of homes that would sell could be 694,000.
Only 24 percent of the single family homes on the market are complete and ready to be occupied.
Inventory has been trending lower over the course of 2019 and now stands at a healthy 5.7 months’ supply, with 327,000 new single-family homes for sale. Of that total, just 78,000 are completed, ready to occupy. The median sales price in 2019 was $331,400. The median price of a new home sale in 2018 was $329,700.
These trends vary somewhat regionally and on a year-to-date basis. New home sales are 10.1 percent higher in the Midwest and 31 percent higher in the West. Sales are down 11.8 percent in the Northeast and 15.4 percent in the South.