New home sales increased 2.3% month-over-month in December to a seasonally adjusted annual rate of 616,000 units (consensus 614,000) from a downwardly revised 602,000 (from 640,000) in November. On a year-over-year basis, new home sales were down 26.6%. We have seen in the weekly mortgage applications reports that the pullback in mortgage rates has spurred some renewed demand among home buyers. Reality is though with rates over 6.2%, inflation high- and real-income lower affordability and supply pressures remain for many prospective buyers.
US new home sales for December 2022
- Sales of new single‐family houses in December 2022 were at a seasonally adjusted annual rate of 616,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 2.3 percent (±18.5 percent)* above the revised November rate of 602,000, but is 26.6 percent (±13.2 percent) below the December 2021 estimate of 839,000.
- An estimated 644,000 new homes were sold in 2022. This is 16.4 percent (±3.8 percent) below the 2021 figure of771,000.
- The median sales price of new houses sold in December 2022 was $442,100. The average sales price was $528,400.
- The seasonally‐adjusted estimate of new houses for sale at the end of December was 461,000. This represents a supply of 9.0 months at the current sales rate.
New home sales month-over-month/year-over-year by region:
- Northeast (-19.4/-21.6%)
- Midwest (+35.2%/-14.1%)
- South (+6.5%/-17.5%)
- West (-15.3%/-49.6%)
Note new home sales in the West has the highest concentration of higher-priced homes.
The report confirms the effect of rates and new home sales remain concentrated in higher-priced homes, as inflation pressures, pushed by supply constraints and labor shortages, are curtailing the building of lower-priced homes and pinching affordability for lower-income buyers.
Existing home sales account for 90% of US transactions and are calculated on a contract close basis. New home sales account for the remaining 10% and are based on contract signings.
The big question is after the surge in rates and slash in rates how much damage has been done with the massive wealth erosion.
Source: Census.gov
From The TradersCommunity News Desk