Mortgage rates hold back November new home sales
While housing starts and existing-home sales both showed improvements in November, that was not the case for new home sales.
Sales of new single‐family houses in November declined 12.2% to a seasonally adjusted annual rate of 590,000 compared to the revised October rate of 672,000, the U.S. Census Bureau and the Department of Housing and Urban Development reported today.
The latest figure for November 2023 is 1.4% above the November 2022 estimate of 582,000, however.
The National Association of Home Builders (NAHB) said elevated mortgage rates “acted as a drag on new home sales” in November. But the association sales are expected to rise as we move into the new year.
“New home sales activity should improve in the months ahead as mortgage interest rates settle in below a 7% rate,” said Alicia Huey, chairman of the National Association of Home Builders (NAHB) and a custom home builder from Birmingham, Alabama. “Our latest builder survey turned positive in December, with builders indicating they expect a rise in future sales.”
The median sales price of new houses sold in November 2023 was $434,700, increasing 3.5% from a revised October median price of $419,900. But the average sales price dipped by 1.9% to $488,900 from a revised October average price of $498,500.
“New home sales were weaker in November as mortgage interest rates likely reached a cycle peak at 7.79% per Freddie Mac at the end of October,” said NAHB Chief Economist Robert Dietz. “Mortgage rates have since moved lower, with Freddie Mac reporting a 30-year fixed-rate of 6.67% this past week.”
New single-family home inventory in November jumped to the highest level since November 2022, rising 16.5% from the previous month to 451,000. This represents a 9.2-month supply at the current building pace.
After five straight months of declines, existing-home sales pulled ahead slightly in November. Total existing-home sales in November increased 0.8% to a seasonally adjusted annual rate of 3.82 compared to the prior month, the National Association of Realtors (NAR) reported.
The latest Monthly New Residential Construction report showed housing starts in November increased 14.8% to a seasonally adjusted annual rate of 1.560 million compared to the revised October estimate of 1.359 million. The latest report is also 9.3% ahead of the November 2022 rate of 1.427 million.
Here’s how new home sales performed regionally on a year-to-date basis:
In the Northeast, new home sales increased 4.9%
The Midwest saw new home sales climb 3.6%.
Sales in the South rose 4.4%.
In the West, sales moved ahead by 2.6%.
