New single-family home sales grew 8.0% to a seasonally adjusted annual rate of 664,000 in December, according to the U.S. Census Bureau. Compared with December 2022, sales of new homes were up 4.4%.
“The solid new home sales rate in December was fueled by a lack of existing inventory in the resale market and declining interest rates,” stated Alicia Huey, chairman of the National Association of Home Builders. “The rise in sales also coincides with our latest builder surveys, which show a marked increase in future sales expectations because of falling mortgage rates.”
Regionally, new home sales surged 3.2.0% in the Northeast, 10.6% in the South and 9.2% in the Midwest. New home sales in the West declined 3.4%.
The median sales price was $413,200, with an average sales price of $487,300. The estimated number of new houses for sale at the end of December was 453,000, a supply of 8.2 months at the current sales rate.
“New home sales ended the year on a high note thanks largely to falling interest rates and a decline in existing home sales,” added Danushka Nanayakkara-Skillington of NAHB. “And while moderating interest rates are a promising sign for new home sales in the year ahead, long-term issues such as a shortage of buildable lots, a lack of skilled labor and excessive regulations will continue to pose challenges for builders.”
