Sales of newly built, single-family homes in December increased 1.6 percent to a seasonally adjusted annual rate of 842,000, from a downwardly revised November reading, according to recent data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.
Inventory remains low at just a 4.3 months’ supply, continuing to push home prices up. In December, there were 302,000 new single-family homes for sale, 18.9 percent lower than December 2019.
The median sales price was $355,900. A year earlier, the median price of a new home sale was $329,500.
Regional Breakdown:
Northeast: +21.2%
Midwest: +24.2%
South: +17.5%
West: +18.9%
What the Industry Is Saying:
“Sales growth continues in lower cost, lower density markets,” said Chuck Fowke, chairman of the National Association of Home Builders (NAHB) and a custom home builder from Tampa, Fla. “Indeed, the Midwest posted a 24 percent sales gain in 2020. Looking forward, builders are concerned that increased regulatory burdens in 2021 could hurt housing affordability.”
“While the market remains solid, median home prices are increasing due to higher building material costs, most notably softwood lumber, and a shift to larger homes,” said NAHB Chief Economist Robert Dietz.
“It’s been surprising to many that high demand for new homes is occurring in the midst of a global pandemic. However, this strong demand is an acceleration of longer-term trends, with millennials now in their mid to late 30s and at a stage in life where people often move toward single-family housing and homeownership, along with historically low mortgage interest rates. In addition, the pandemic has motivated many people to move this past year,” said Gregg Logan, managing director and director of Community & Resort at RCLCO Real Estate Advisors.
