Rough Finish to a Strong Year for New Home Sales

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After three solid months of new home sales,
some give-back could only be expected; exactly what happened in December.  The Census Bureau and the Department of
Housing and Urban Development report that sales of newly constructed homes fell
9.3 percent in December.  The seasonally
adjusted annual rate of 625,000 was down 9.3 percent from the November revised
estimate.  That still left the December
sales up a healthy 14.1 percent higher than sales in December 2016.

What probably hurt more than the slowing
sales in December was the November revision.  The original estimate, 733,000, was not only
unexpected, but represented what would have been the highest rate of sales since
the housing crash.  The month’s sales are
now estimated at 689,000. 

Analysts had been looking for a rollback
but had expected sales would come in between 635,000 and 710,000.  The consensus of those polled by Econoday was 680,000.

On a non-seasonally adjusted basis, there
were an estimated 43,000 units sold.  In
November the number was 49,000.

The Census Bureau reports there were an
estimated 608,000 new homes sold over the course of 2017.  This is 8.3 percent increase from the 561,000
sold the previous year.

The median price of a home sold in
December was $335,400 and the average sales price was $398,900.  The respective prices in December 2016 were
$315,200 and $357,700.

Sales were down in all four regions on a
month-over-month basis, but all except the Midwest posted year-over-year
gains.  In the Northeast sales dipped by
2.4 percent from November but were 10.8 percent higher than a year earlier.

In the Midwest there was a decline of 10.0
percent from November to December and 3.1 percent fewer homes were sold than in
December 2016.  Sales in the South fell
9.8 percent month-over-month but gained 15.7 percent over the previous 12
months. The West saw sales decline 9.5 percent in December, but there were 18.8
percent higher than a year earlier.

At the end of the reporting period there
were an estimated 295,000 new homes for sale, up from 261,000 a year earlier.
The inventory at year’s end was estimated at a 5.7-month supply at the current
rate of sales.  The median time completed
homes were on the market was 3.2 months.



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