New-home sales increased in November, driven by strong buyer demand, low existing-home inventory and a predicted increase for mortgage interest rates, according to the latest data from the Commerce Department.
Key details:
- Newly built, single-family home sales in November increased 12.4% to a 744,000 seasonally adjusted annual rate from a downwardly revised reading in October.
- New-home sales were down 14% YoY.
- Inventory remains steady at a 6.5-months’ supply, with 402,000 new single-family homes for sale, compared to 290,000 in November 2020.
- The median sales price continued to rise to $416,900 from the $408,700 median sales price posted in October, and increased 18.8% YoY.
Year-over-year regional breakdown:
Northeast: -1.3%
Midwest: -5.3%
South: -4.5%
West: -12.5%
What the industry is saying:
“Our members are seeing strong buyer traffic as continued low mortgage rates are helping fuel sales. However, builders are still grappling with major supply chain issues and soaring materials costs, which are causing construction delays.” — Chuck Fowke, Chairman, National Association of Home Builders
“Despite the increase in sales, housing affordability remains a major concern. With building material pricing, the challenge for builders in 2022 will be to deal with higher input costs while making sure home prices remain within reach for American home buyers.” — Danushka Nanyakkara-Skillington, Assistant Vice President of Forecasting and Analysis, National Association of Home Builders
“New-home sales improved for a third month in a row as the housing market maintains its strength. New-home starts were also up this month, as many factors continue to align to make the for-sale market robust, including low interest rates and families seeking more space for work from home arrangements. November is historically a slower month for sales because of the Thanksgiving holiday, so the continued growth this month continues reflect buyers’ optimism and predicts a strong ending to the year.” — Kelly Mangold, RCLCO Real Estate Consulting
