New single-family home sales fell in December, posting an annual rate of 536,000, 10.4 percent below the prior month’s figure, according to the U.S. Census Bureau and the Department of Housing and Urban Development (HUD). The median new home sold price was $322,500, while the average list price was $384,000. The estimate for new home inventory in December was 259,000, a 5.8 month-supply.
“While attention on today’s disappointing report is quickly focusing on the impact of the December surge in mortgage rates, I believe that the decline in sales is more about supply in the existing-home market,” says realtor.com® Chief Economist Jonathan Smoke, “but with the existing-home market as tight as a drum, why aren’t we seeing more sales of new homes? A lot of it has to do with the numerous supply-side challenges builders face, from a lack of finished lots, limited capital and financing options, and labor shortages. The new construction data reflect those barriers to growth, as single-family starts were only up 4 percent year-over-year in December.
“New home sales will likely outpace single-family growth as builders sell more homes that haven’t been started, but supply-side constraints will likely keep that growth to single digits in 2017,” Smoke says.
More new homes were sold in 2016 than 2015, up 12.2 percent to 536,000 from 501,000.
Source: U.S. Census Bureau
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