The number of new home sales in the United States fell in November contrary to market expectations. The decline was particularly great in the south. This suggests that the road to recovery in the housing market will not be smooth.
Key Point
- Sales of new single-family homes (seasonally adjusted, annualized) fell 12.2% from the previous month to 590,000 units.
- Lowest level in 1 year
- The median number of households in a Bloomberg survey of economists rose to 690,000.
- The previous month’s figure was revised down to 672,000 units (preliminary figure: 679,000 units).
Top row: New build home sales, Bottom row: New build home sales in the south
Source: US Department of Commerce
The current slump in sales may be just a temporary setback in a housing market on the verge of repair. The number of US housing starts announced this week for November was the highest in six months.
US housing starts an unexpected surge to a six-month high – helped by a lack of used properties
“November’s weak new home sales numbers aren’t particularly bad, especially given the strong housing start data,” Robert Frick, corporate economist at Navy Federal Credit Union, said in a note. “If things continue like this, the new home market is likely to perform well in 2024. Inventory levels are already high and supply is expected to increase further. If interest rates fall next year , sales should surge.”
The outlook for the new home market is brightening, with 30-year mortgage rates once again below 7%, amid growing expectations that the US Federal Reserve will cut interest rates next year. In addition, builders are taking advantage of the lack of inventory in the current housing market to attract buyers with interest subsidies and mortgage rate discounts.
The median sales price of newly constructed homes fell 6% from the same month last year to $434,700 (about 61.9 million yen).
The number of properties listed for sale at the end of November increased from the previous month, reaching the highest level in almost a year. This is the fourth consecutive month of increase.
By region, the largest region, the southern part, saw a decrease of around 21%, the lowest level since April 2020. It also decreased in the west.
See the table for detailed statistics.
Original title: US New Home Sales Drop to One-Year Low (excerpt)
(Updates with an economist’s comment in the third paragraph)
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