ARLINGTON, Va.—New home sales rose 1.3% in November to 640,000 annualized units but were 15.3% lower than one year ago. October’s sales were also revised down 8,000 units, reported NAFCU, citing U.S. Census Bureau data.
NAFCU Economist Noah Yosif noted that November’s sales “exceeded expectations,” but there are still constraints in the market.
“The market remains challenged by excessively high new construction home prices in conjunction with elevated mortgage rates, which have effectively priced out the average American household,” Yosif said.
Yosif referenced the National Association of Home Builders/Wells Fargo Housing Market Index, which found that “builder confidence in the market declined for the 12th consecutive month in December,” though it was the “smallest decline in sentiment over the past 12 months, with many respondents expecting reduced long-term inflation to lower home prices and bolster sales.”
‘Remain Depressed’
Another report, the S&P CoreLogic Case-Shiller Index, also showed “a laggard decline in home prices across the United States since June, following a similar trajectory as the Consumer Price Index.”
“These datapoints suggest the housing market will remain depressed well into 2023, with a long-term rebound substantially determined by the course of inflation and consequent monetary policy,” Yosif said.
New home sales were mixed across the U.S. in November, with the West and Midwest increasing 27.6% and 21.3%, respectively. Sales fell in the South (-2.1%) and Northeast (-8.5%).
Supply & Demand
Based on current month sales, there were 8.6 months of supply in November, down 0.7 months from October. The number of unsold homes left on the market increased 9,000 homes to 461,000. This represents an 18.2% increase from year-ago inventory levels.
The median new home price, non-seasonally adjusted, declined 2.8% in November to $471,200. That amount is 9.5% higher than the previous year.
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