- New home sales increased 3.7 percent in December from November, to 621,000 units (SAAR), according to the Census Bureau. Sales ended the year down 2.4 percent from December 2017.
- Inventory was up 3 percent from November and 17 percent from a year ago to the highest level in a decade (December 2008).
- The median price of new homes sold in December was $318,600 (non-seasonally adjusted) ), down 7.2 percent from a year ago.
Today’s new home sales data from December likely reflect closed transactions that were pending in November, transactions begun when interest rates were near their recent highs and builders were aggressively cutting prices in response. The strategy largely appears to have worked, with sales volumes coming in better than expected — at least on the surface. Prior months’ activity was revised sharply downward, and sales ended 2018 below where they ended 2017. New homes selling in December were likely permitted for construction in the Spring or early Summer, when the 2019 economic outlook was worse than now. But more favorable conditions may be on the horizon: Building permits increased in December, and buyers appear responsive to conditions that are more favorable now than they were just a few months ago, when rates were climbing and the government shutdown loomed large. And price cuts are still relatively frequent, particularly in larger markets, which may goose sales volumes as prices fall within the budget of more buyers. Its been a disappointing fall and winter, but the sun is coming back soon.
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via December New Home Sales: Better Days Ahead?
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