In 2022, new-home sales were down 16.4% compared to 2021, but falling mortgage rates have pushed sales higher recently. In Dec., they were up 2.3% month-to-month.
WASHINGTON – New-home sales posted a modest gain in December, increasing 2.3% (seasonally adjusted annual rate) from a downwardly revised reading in November, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.
For all of 2022, new-home sales were down 16.4% in 2022 compared to the previous year.
“Builder incentives and declining mortgage rates during the month of December helped push new home sales up for the month,” says Jerry Konter, chairman of the National Association of Home Builders (NAHB). “However, because of higher construction costs and decreasing affordability, sales are down more than 25%” year-to-year.
The median price of a new home also declined a bit month-to-month in December, but it’s “still up 7.8% compared to last year,” adds Danushka Nanayakkara-Skillington, NAHB’s assistant vice president for forecasting and analysis. “Elevated inventories are another concerning sign of a soft market.”
A new home sale occurs when a sales contract is signed or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the December reading of 616,000 units is the number of homes that would sell if that month’s pace continued for the next 12 months.
New single-family home inventory remained elevated at a 9-months’ supply (varying stages of construction). A measure near a 6-months’ supply is generally considered a balanced market. The count of homes available for sale, 461,000, is up 18.5% year-to-year.
In December 2021, there were just 33,000 completed, ready-to-occupy homes available for sale; by December 2022, that number increased 115% to 71,000. Still, completed, ready-to-occupy inventory is consistently just 15% of total inventory.
The median new home sale price in December was $442,100, down 3.7% from November and up 7.8% year-to-year, due largely to higher construction costs.
Regionally, on a year-to-year basis, new home sales fell in all four regions, down 8.2% in the Northeast, 22.1% in the Midwest, 13.0% in the South and 23.5% in the West.
© 2023 Florida Realtors®