U.S. New Home Sales Rise as Prices Decline in December
by:Tom Moeller
|in:Economy in Brief
Summary
- Gain follows two months of weakening.
- Median sales price falls to two-year low.
- Sales were strong regionally, except in the West.
New single-family home sales rose 8.0% (4.4% y/y) during December to 664,000 units (SAAR) after falling 9.0% to 615,000 in November, according to a release jointly issued by the U.S. Census Bureau and the Department of Housing and Urban Development. The Action Economics Forecast Survey expected sales of 650,000. Sales remained below the 1.029 million high in August 2020. During all of 2023, new home sales totaled 668,000, up 4.9% from 637,000 in 2022 but they remained below the level of 769,000 in 2021. New home sales are recorded when the sales contract is signed.
The median price of a new home fell 3.0% in December (-13.8% y/y) to $413,200 during December from $426,000 in November. These prices were below the October 2022 peak of $496,800. The average sales price of a new home rose 0.4% (-14.3% y/y) to $487,300 last month from $485,500 in November. These sales price data are not seasonally adjusted.
By region, sales in the Northeast increased 32.0% (-2.9% y/y) to 33,000 in December after falling 26.5% in November. Sales in the South rose 10.6% last month (3.7% y/y) to 419,000 after a 12.5% November decline. Sales in the Midwest rose 9.2% (6.0% y/y) in December to 71,000 after a 14.0% November improvement. Offsetting these gains, December new home sales in the West were off 3.4% (+7.6% y/y) to 141,000, the fourth decline in the last five months.
The number of new homes on the market last month rose 0.9% (0.4% y/y) to 453,000 (SA), the fifth consecutive monthly increase. The latest figure stands well above the 281,000 low in October 2020. The seasonally adjusted months' supply of new homes for sale fell to 8.2 months in December and reversed roughly half of November’s gain to 8.8 months. It remained down from a high of 10.1 months in July 2022.
The median number of months a new home stayed on the market eased to 2.6 last month from 2.7 months in November. The reading remained up from the record low of 1.5 months in both September and October of 2022, but down from a high of 5.1 months in March 2021. These figures date back to January 1975.
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.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, 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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