Haver Resources
Jan 26

U.S. New Home Sales Rise Further in December; Prices Increase

Summary
  • Sales rise to highest level in three months lifting annual sales for a second straight year.
  • Regional sales are mixed.
  • Median sales price stands at five-month high.

New single-family home sales rose 3.6% (6.7% y/y) to 698,000 units (SAAR) in December from 674,000 in November, revised from 664,000. October sales were revised to 615,000 from 627,000 according to the U.S. Census Bureau. The Action Economics Forecast Survey expected 670,000. The rise in December sales occurred as the average 30-year fixed-rate mortgage eased to an average 6.72% last month from 6.81% in November, according to Freddie Mac. It compared to 6.82% one year earlier.

By region, home sales were mixed across the country last month. New home sales in the Northeast rebounded 41.7% (25.9% y/y) to 34,000 in December after falling 40.0% in November. Sales in the West rose 20.3% (6.9% y/y) to 154,000 after falling in each of the prior four months to a November low of 128,000. To the downside, new home sales in the Midwest fell 3.3% (+40.3% y/y) to 87,000 after rising 18.4% in November. Sales have trended higher since the middle of 2022. Sales in the South declined 2.1% (+0.5% y/y) to 423,000 last month after surging 21.7% in November.

The median sales price of a new home rebounded 6.1% (2.1% y/y) to $427,000 in December after a 5.4% decline to $402,500 in November. It was the highest price in nine months but has fallen 7.2% since its October 2022 peak of $460,300. The average sales price of a new home jumped 5.9%% (4.2% y/y) to $513,600 in December following a 7.8% November decline. The average price was 5.1% below a high of $541,200 in July 2022. These sales price data are not seasonally adjusted.

The number of unsold new homes on the market rose 1.2% (10.0% y/y) to 494,000 in December, the highest level since December 2007, after a 1.5% November increase. The latest figure was 6.0% above a low of 466,000 in October 2022. The seasonally adjusted months’ supply of new homes for sale eased to 8.5 months in December after rising to 8.7 months in November. The latest reading, remained above a low of 6.9 months in May 2023.

The median number of months a new home stayed on the market increased to 2.8 months in December, the highest in nine months, after rising to 2.5 months in November. The latest number was up from the record low of 1.5 months in both September and October of 2022 but was well below a high of 5.1 months in March 2021. These figures date back to January 1975.

New home sales are recorded when the sales contract is signed. New home sales activity and prices are available in Haver’s USECON database. The consensus expectation figure from Action Economics is available in the AS1REPNA database.

About The Author

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Thomas J. Moeller

Haver Analytics is pleased to bring Thomas J. Moeller’s commentaries on the state of the U.S. economy to its clients.

Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters’ Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.

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