According to the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, sales of newly built, single-family homes rose to a seasonally adjusted annual rate of 657,000 units in November 2018 after an upwardly revised October 2018 report. This is the highest sales pace since March 2018. However, on a year-to-date basis, sales are down 7.7 percent from this time in 2017.
The sales report was delayed due to the partial government shutdown.
"The sales increase was fueled by a notable uptick in homes sold at the affordable end of the market," said Randy Noel, chairman of the National Association of Home Builders. "There is clearly a demand for new home homes even as builders continue to grapple with supply-side challenges, including shortages of lots and labor and higher building material costs stemming from tariffs."
"Solid job growth and growing household formations should support future demand for housing even as builders continue to address mounting affordability woes," said NAHB Chief Economist Robert Dietz. "Builders are doing all they can to hold the line on costs to meet this demand, particularly at the entry-level market."
A new home sale occurs when a sales contract is signed or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the November reading of 657,000 units is the number of homes that would sell if this pace continued for the next 12 months.
The inventory of new homes for sale rose to 330,000 in November. The median sales price fell to $302,400, as the market has shifted to lower-cost houses.
Regionally, on a monthly basis, new home sales jumped 100 percent in the Northeast, 30.5 percent in the Midwest and 20.6 percent in the South. Sales fell 5.9 percent in the West.
U.S. mortgage applications for new home purchases decreased 6.1 percent from a year ago. Compared to November 2018, applications decreased by 13 percent. This change does not include any adjustment for typical seasonal patterns.
According to the U.S. Department of Housing and Urban Development, sales of newly built, single-family homes in the U.S. fell to a seasonally adjusted annual rate of 544,000 units in October 2018, after an upwardly revised September report.
According to new U.S. housing market research by Zillow, the combination of rising home prices and interest rates creates a doubly challenging environment for would-be home buyers, making monthly mortgage payments on even modestly priced homes more of a financial burden.
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