New home sales display solid growth in December
New home sales demonstrated growth in December, according to estimates released this morning by the U.S. Census Bureau and the Department of Housing and Urban Development.
Sales of new single-family homes in December 2023 were at a seasonally adjusted annual rate of 664,000, rising 8% above the revised November estimate of 615,000. The latest figure is also 4.4% above the revised December 2022 estimate of 636,000.
According to the latest Monthly New Residential Sales Report, an estimated 668,000 new homes were sold in 2023. This is 4.2% above the 2022 figure of 641,000.
“The solid new home sales rate in December was fueled by a lack of existing inventory in the resale market and declining interest rates,” said Alicia Huey, chairman of the National Association of Home Builders (NAHB) and a custom home builder from Birmingham, Ala. “The rise in sales also coincides with our latest builder surveys, which show a marked increase in future sales expectations because of falling mortgage rates.”
The seasonally‐adjusted estimate of new houses for sale at the end of December was 453,000. This represents a supply of 8.2 months at the current sales rate and a drop of 6.8% compared to the revised November 2023 figure of 8.8 months. Compared to December 2022, supply is down 3.5%.
The median sales price of new houses sold in December 2023 was $413,200, declining 3% from the revised November 2023 median price of $426,000. But compared to the median price of $479,500 in December 2022, the median sales price dropped nearly 14%.
The average sales price in December 2023 was $487,300, edging up by just 0.37% from the revised November 2023 average price of $485,500. Compared to an average price of $568,700 in December 2022, the average price was down more than 14% in December 2023.
“New home sales ended the year on a high note thanks largely to falling interest rates and a decline in existing home sales,” said Danushka Nanayakkara-Skillington, NAHB’s assistant vice president for forecasting and analysis. “And while moderating interest rates are a promising sign for new home sales in the year ahead, long-term issues such as a shortage of buildable lots, a lack of skilled labor and excessive regulations will continue to pose challenges for builders.”
Here’s how December 2023 new home sales performed on a regional basis:
- New home sales in the Northeast for December jumped 32% ahead of the prior month but are down 2.9% on a year-over-year basis.
- In the Midwest, sales increased 9.2% for the month and 6% on a year-over-year basis.
- The South saw sales climb 10.6% in December and 3.7% compared to December 2022.
- Sales in the West fell 3.4% in December but are 7.6% ahead of a year ago.
