New Home Sales Up 1.5 Percent

March 8th, 2019 by Drew Vass, Executive Editor

According to newly released data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, sales of newly built, single-family homes made yearly gains of 1.5 percent in 2018. December sales numbers rose 3.7 percent to a seasonally adjusted annual rate of 621,000 units after a revised November report.

The report was initially delayed due to a partial government shutdown.

“The slight gain for 2018 new home sales reflects solid underlying demand for homeownership,” said NAHB Chairperson Greg Ugalde, a home builder and developer from Torrington, Conn. “Housing affordability remains a challenge across the country, but conditions have improved in early 2019, as illustrated by the recent uptick in builder confidence.”

Despite a period of weakness in fall 2018, new home sales ended the year with a small gain, added NAHB chief economist Robert Dietz.

“While the December sales pace improved on a monthly basis, the current rate of sales remains off the post-Great Recession trend due to housing affordability concerns made worse by the rise in mortgage interest rates at the end of the year,” Dietz said.We expect lower mortgage rates in the early months of 2019 will lead to additional new home demand.”

New home sales are registered when a sales contract is signed or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed.

Adjusting for seasonal effects, the 621,000 units predicted for December would sell if pace continues for the next 12 months.

Inventory of new homes for sale rose in December to 344,000 homes from a year prior while inventory stood at 294,000. The median sales price increased in December to $318,600, decreasing from a year prior when median sales price was reported at $343,300. Primarily, this is due to the rising price of incentives and slower change toward additional entry-level inventory, NAHB officials said.

Regionally, new home sales declined 16 percent in the Northeast and one percent in the West, yet rose four percent in the South and six percent in the Midwest.

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