ARLINGTON, Va.—November new home sales rose 17.5% from October, marking the fastest sales pace since July 2007.
However, lack of affordable inventory remains the biggest constraint on the housing market, said NAFCU Research Assistant Yun Cohen in a NAFCU Macro Data Flash report.
"Approximately 70% of the increase in sales during the month was driven by properties where construction has not yet started, which indicates strong buyer demand and some construction backlogs," Cohen said. " … Construction activity has been undermined by shortages of labor and lots. However, builders' confidence for newly built single-family homes rose to an 18 year-high in December according to the National Association of Home Builders, which bodes well for housing starts in 2018."
According to the Census Bureau, November's new-home sales represent a 26.6% increase from a year ago.
Despite recent natural disasters such as hurricanes and wildfires, sales improved in all four regions in November: the West by 31.1%, the South by 14.9%, the Northeast by 9.5% and the Midwest by 6.9%. Three of the four saw double-digit year-over-year sales gains as well, Cohen reported.
Based on current-month sales, there were 4.6 months of supply in November, down from 5.4 months in October. The median new-home price, non-seasonally adjusted, decreased from $319,600 in October to $318,700 in November. November's prices were 1.2% higher than a year ago, Cohen said.