The real estate market last year had displayed a strong trend for new home purchases. Specifically, the sale of newly built single-family homes alone for 2017 had increased by 8.3% over the previous year.
“The number of consumers planning to buy a new home in the near future is trending upward,” says Randy Noel, chairman of the National Association of Home Builders. “Inventory remains low, but its growth in 2017 is an encouraging sign. Our members are telling us that market conditions continue to improve.”
At the year’s end, new-home sales did have a slight slowdown by 9.3% month over month in December to an adjusted annual rate of 625,000 units. Some could argue however, that closed transactions typically do wind down during the holidays in the winter in many markets.
“Some moderation in sales was expected this month after a strong November reading,” says Michael Neal, the NAHB’s senior economist. “With ongoing job creation and rising home equity, we should see housing demand continue to grow in the months ahead.”
The new home numbers have not quite fulfilled the national shortage for overall housing inventory. The supply of new-home sales was at 295,000 for the month of December which translates into a 5.7 month supply at the current sales pace.
The new home real estate market does seem to be addressing the middle or upper-tier of buyers as indicated by the median sales prices. Specifically, the median sale price of new homes sold in December was at $355,400 which is approximately 36% higher than that of an existing home at $246,800 according to the National Association of Realtors.
When studying the new home sales on a regional level for the end of the year in December, the biggest decline was seen in the Midwest by 10%. Following that was the South at 9.8%, the West by 9.5% and only 2.4% in the Northeast.