ARLINGTON, Va.—New-home sales rose 11.9% in December to 744,000 annualized units, while November saw a downward revision of 19,000 units. Compared to last year, December sales were 14% lower.
“New-home sales surged in December to their highest level in nine months,” said NAFCU Chief Economist and Vice President of Research Curt Long. “Supply chain issues are still bedeviling builders, as 48% of sales were of homes still under construction.
"That figure was thirty-five% pre-COVID and has been steadily trending up during the pandemic," continued Long. "Similarly, roughly 10% of homes for sale at the end of December were completed, which is half the pre-COVID rate and up slightly from the all-time low in September. Still, the overall inventory situation in the new home market is better than for existing homes, leading to lower overall price appreciation in the former than the latter."
Sales rose in three Census regions with the Midwest rising 56.4%, followed by the South (+14.9%), and the West (+0.4%). The Northeast region fell 15.6% on the month.
More Unsold Homes on Market
Based on current month sales, there were roughly six months of supply in December, down by 0.6 months from November. Unsold homes left on the market increased by 6,000 homes to 403,000 in November, representing a 35% increase from year-ago inventory levels, Long said.
“The housing market is desperate for inventory of any stripe, but supply chain snags have been slow to thaw," noted Long. "Until home supply rebalances, rising mortgage rates look like a low-level concern, but there is the possibility that rates could dent demand in the second half of the year.
"For the time being, sales should continue on a steady upward trend tracing inventory levels," concluded Long.
Of note, the median home price, non-seasonally adjusted, fell by 9.2% in December to $377,700, which is 3.4% higher than last year.