More buyers purchased new homes last year. The sale of newly built single-family homes rose 8.3 percent in 2017 compared to the previous year.
NAR’s existing-home sales report: Why Sales Could Have Been Even Higher in 2017
“The number of consumers planning to buy a new home in the near future is trending upward,” says Randy Noel, chairman of the National Association of Home Builders. “Inventory remains low, but its growth in 2017 is an encouraging sign. Our members are telling us that market conditions continue to improve.”
But new-home sales did underperform at the end of 2017. New-home sales slowed 9.3 percent month over month in December to a seasonally adjusted annual rate of 625,000 units.
“Some moderation in sales was expected this month after a strong November reading,” says Michael Neal, the NAHB’s senior economist. “With ongoing job creation and rising home equity, we should see housing demand continue to grow in the months ahead.”
Also, new-home sales have fallen short of relieving nationwide housing shortage woes. The inventory of new-home sales was 295,000 in December, which is a 5.7-month supply at the current sales pace.
However, the new-home market continues to cater to the middle- or upper-tier buyer segment, as reflected in the median sales price. The median sales price of new homes sold in December was $335,400. The price is nearly 36 percent higher than the cost of an existing home, which was $246,800 in December, according to the National Association of REALTORS®.
Only 4 percent of new homes sold in December were priced at $150,000 or lower; 13 percent were between $150,000 and $199,999; 47 percent sold between $200,000 to $399,999; 11 percent sold for $400,000 to $499,999; and 25 percent sold for $500,000 or more.
Regionally, new-home sales decreased across the country in December, posting the biggest drops in the Midwest. New-home sales fell 10 percent in December month over month in the Midwest and by 9.8 percent in the South, 9.5 percent in the West, and 2.4 percent in the Northeast.