ARLINGTON, Va.—Data from the Census Bureau show new home sales increased 3.7% in December, but NAFCU Chief Economist and Vice President of Research Curt Long notes the gains are against a sizable downgrade to November's sales, which were revised downward to 599,000 from 657,000.
"The October sales estimate also declined by 13,000 units. Future revisions notwithstanding, new home sales for 2018 currently register a mere 0.9% increase over 2017," Long added. "The main constraints are still declining affordability in the face of rising mortgage rates and supply shortages. The latter has eased a bit recently, and price growth has declined as a result."
Sales increased in three of the four regions in December. Sales in the small and volatile Northeast grew 44.8%, followed by gains in the South (+5%) and the West (+1.4%). Sales in the Midwest region declined 15.3%.
Based on current month sales, there were 6.6 months of supply in December, down slightly from 6.7 months in November. The number of unsold homes left on the market rose from 340,000 to 343,000 units. This represents a 16.7% increase from a year ago.