New-Home Sales Dip, Builders Still Upbeat
December 24, 2014
New-home sales fell 1.6 percent in November, despite home builders remaining optimistic that the sector is taking a turn for the better. It was the second consecutive month that new-home sales posted a decline.
Latest existing-home sales report: Home Sales Lost Momentum in November
Sales of newly built single-family homes were at a seasonally adjusted annual rate of 438,000 units in November, according to newly released data by the Commerce Department. New-home sales also were down by 1.6 percent year-over-year.
"Though home sales have edged slightly lower, builders are reporting confidence in the market and are increasing their inventory in anticipation of future business," says Kevin Kelly, chairman of the National Association of Home Builders.
David Crowe, NAHB’s chief economist, says that sales have held relatively stable during the past four months. "As the labor market and broader economy continue to strengthen, we can expect the housing sector to gain momentum heading into next year," Crowe says.
Inside the New-Home Market
Inventories of new-homes are on the rise, reaching the highest level since May 2010. The inventory of new homes for sale increased to 213,000 in November, marking a 5.8-month supply at the current sales pace.
The median new-home sales price increased 1.4 percent in November year-over-year, reaching $280,900.
Across the country, the West was the only region to see an increase in new-home sales in November, with sales rising 14.8 percent month over month. Sales dropped by 12 percent in the Northeast, 6.4 percent in the South, and 6.3 percent in the Midwest.
On Monday, the National Association of REALTORS® reported that existing-home sales nationwide also posted a drop in November, falling 6.1 percent to a seasonally adjusted annual rate of 4.93 million. Sales fell to their lowest annual pace since May. However, existing-home sales remain above year-over-year levels, up 2.1 percent compared to November 2013.
Source: National Association of Home Builders and “U.S. New Home Sales Fall for Second Straight Month in November,” Reuters (Dec. 23, 2014)
Updated: August 17, 2018