To the surprise of many, new home sales rose 5.8% in November, a seasonally adjusted annual rate of 640,000According to data published by US Census Bureau and the Department of Housing and Urban Development (HUD) Friday.
Last month’s new home sales data far exceeded expectations. The market he expected to shrink by 4.7% in November. The median sales price for new homes sold last month was $471,200, with an average sales price of $543,600, according to the data.
Analysts said lower mortgage rates and greater incentives from home builders were the drivers last month. But make no mistake, conditions are still suboptimal, and new home sales data doesn’t capture all headwinds like permit declines and cancellations.
“Despite a slight increase in new home signings, the housing market remains in a lull and this pattern is likely to continue into January.” Bright MLS, said in a statement. “The average price of new homes rose again in November, contrary to expectations that builders would cut prices to adjust inventories. It’s a trend.”
The Census Bureau and HUD have also sharply lowered estimates for the past three months to explain the high cancellation rate.About 10,000 contracts have been canceled each month since July, according to . data from John Burns ConsultingYear-to-date total new home sales are at 602,000, while new home sales are around 519,000, according to company data.
Seasonally adjusted new home sales at the end of November were 461,000, representing 8.6 months of supply at current sales rates.
Homebuilders need stronger incentives to make sales.
“Builders sentiment and permits data point to continued weakness in the new home market. first american I am Hisashi Koideda, Deputy Chief Economist. “Amid rising mortgage rates and heightened economic uncertainty, new home prices will need to continue adjusting to attract more buyers.”
Sturtevant adds: However, as inventory continues to grow, new home builders will face more competition from existing homes. ”
