December New Home Sales, Prices, Inventory Rise

The U.S. Census Bureau and the Department of Housing and Urban Development reported Tuesday morning that sales of new homes in December increased to a seasonally adjusted annual rate of 621,000, a rise of 3.7% from the revised November rate of 599,000 and a decrease of 2.4% compared with the December 2017 rate of 636,000. The consensus estimate from a survey of economists expected a rate of around 590,000. The November 2018 rate was revised downward by 58,000.

December’s sharp increase more than offset the steep downward revision to November’s estimate. Combining the December estimate with the original November number sums to a two-month total of 1.19 million sales. Adding the revised November total to the December total gives a total of 1.22 million sales.

At its peak in 2005, new home sales posted a seasonally adjusted annual rate of nearly 1.4 million.

The Census Bureau also reported that the median sales price for new homes sold in December rose by $16,200 to $318,600, and the average sales price rose month over month by $14,600 to $377,000. At the end of December, the number of new homes for sale on a seasonally adjusted basis totaled 344,000, up by 14,000 month over month, and represented a supply of 6.6 months at the current sales rate.

In December, 45% of the estimated 44,000 monthly total were sales for homes priced at less than $300,000. The percentage is down from 49% in November.

Sales of homes priced between $300,000 and $399,999 slipped one percentage point to 22% of all sales. Sales of homes in the range of $400,000 to $499,999 rose by two points to 14%, and sales jumped by 5% for homes sold in a range of $500,000 to $749,999. Home sales for properties priced above $750,000 accounted for 4% of all new home sales in December, down by one point compared with November.

On a seasonally adjusted basis, year over year, new home sales are down 2.4% nationally. In the South, new home sales are up 5%; in the Northeast, sales are down 45%; in the Midwest, sales are down 15%; and in the West, sales rose 1.4%.

On a non-seasonally adjusted basis, the number of homes sold in the South remained flat at 27,000 month over month in November. Home sales were also down 1,000 to 4,000 in the Midwest, while sales in the Northeast rose from 2,000 to 3,000. Sales in the West also remained flat at a total of 10,000.

At the end of December, the for-sale inventory (seasonally adjusted) totaled 343,000, up 3,000 month over month. Inventory was unchanged in the Northeast at 28,000 and up by 1,000 in the Midwest at 43,000. In the South new homes for sale also rose by 1,000 to 179,000 while supply in the West rose by 3,000 to 94,000.

It’s worth noting that the monthly totals are subject to multiple revisions, and those revisions are often significant.