December New Home Sales Hit the Brakes

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The U.S. Census Bureau and the Department of Housing and Urban Development reported Monday morning that sales of new homes in December fell to a seasonally adjusted annual rate of 625,000, a decrease of 9.3% from the downwardly revised November rate of 689,000 and a rise of 14.4% compared with the December 2016 rate of 548,000. The consensus estimate from a survey of economists expected a rate of around 680,000. The November rate was revised downward by 44,000.

At the peak in 2005, new home sales posted a seasonally adjusted annual rate of nearly 1.4 million. September’s annual rate of sales was the highest for the month in the past 10 years.

The Census Bureau also reported that the median sales price for new homes sold in December rose by $16,700 from $318,700 in November to $335,400, and the average sales price rose by $21,800 to $398,900. At the end of November, the number of new homes for sale totaled 295,000, up by 12,000 month over month, and represented a supply of 5.7 months at the current sales rate.

In December, 42% of the estimated 43,000 monthly sales were sales for homes priced at less than $300,000. The percentage is down three points compared with the November rate.

Sales of homes priced between $300,000 and $399,999 fell by eight points to 22% of all sales. Sales of homes in the range of $400,000 to $499,999 fell from 13% to 11%, and sales jumped from 11% to 16% for homes sold in a range of $500,000 to $749,999. Home sales for properties priced above $750,000 accounted for 9% of all new home sales in December, up four points compared with November.

In the South, home sales fell by 3,000 month over month in December to 23,000. Home sales also slipped in the West from 15,000 in November to 13,000 in December.

On a non–seasonally adjusted basis, year-over-year new home sales are up 14.1% nationally. In the West new home sales are up 18.8%, in the South sales up 15.7%, in the Midwest sales down 3.1% and in the Northeast sales up 10.8%.