The U.S. Census Bureau and the Department of Housing and Urban Development reported Monday morning that sales of new homes in November increased to a seasonally adjusted annual rate (SAAR) of 719,000, a rise of 1.3% from the revised October rate of 710,000 and an increase of 16.9% compared with the November 2018 rate of 615,000. The consensus estimate from a survey of economists projected a rate of around 735,000. The October 2019 rate was revised downward by 23,000.
Sales of new homes have settled above 700,000 for four consecutive months.
On a non-seasonally adjusted basis, new home sales are averaging an annualized sales rate of 635,000, up by 57,000 compared with the first 11 months of 2018.
At their 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 November rose by $14,100 to $330,800, and the average sales price rose month over month by $5,200 to $388,200. At the end of November, the number of new homes for sale on a seasonally adjusted basis totaled 323,000, up by 1,000 month over month, and represented a supply of 5.4 months at the current sales rate.
In November, 40% of the estimated 52,000 monthly sales total comprised sales for homes priced at less than $300,000. That is down five percentage points from October. The pricing data suggests that fewer first-time buyers were able to buy a home in November.
Sales of homes priced between $300,000 and $399,999 increased month over month from 24% to 25% of all sales. Sales of homes in the range of $400,000 to $499,999 rose by three points to 15% of the total, and sales also increased by three points to 15% for homes sold in a price range of $500,000 to $749,999. Home sales for properties priced above $750,000 accounted for 6% of all new home sales in both months.
In the South, seasonally adjusted year-over-year new home sales for the first 11 months of 2019 are up 9%. In the Northeast, sales are up 6.7%; in the Midwest, sales are down 1.4%; and in the West, sales rose by 47.9%.
Low mortgage interest rates, continuing demand, a tight labor market and low inventory seem again to be setting the stage for another good year for new home construction.
It’s worth noting that the monthly totals are subject to multiple revisions and those revisions are often significant.