The real estate market for 2017 showed a strong trend for new home purchases. Specifically, the sale of newly built single-family homes alone for 2017 increased by 8.3% over the previous year.
“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.”
By the end of the year new-home sales did have a small slow down by 9.3% month over month in December to a seasonally adjusted annual rate of 625,000 units. One could argue however, that transactions normally slow during the holidays in the winter in many markets.
“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.”
The new home sales have not quite fulfilled the shortage for housing in our nation. The inventory of new-home sales was at 295,000 for December which equates to a 5.7 month supply at the current sales pace.
The new home market does appear to be catering to the middle or upper-tier of buyers as indicated by the median sales prices. Specifically, the median sale price of new homes sold in the month of December was at $355,400 which is approximately 36% higher than that of an existing home at $246,800 according to the National Association of Realtors.
When consulting new home sales on a regional level for December, the biggest decrease was seen in the Midwest by 10%. Following that was the South at 9.8%, the West by 9.5% and only 2.4% in the Northeast.