New home sales unexpectedly plunge to one-year low in November

Sales of new US single-family homes dropped to a one-year low in November, but the unexpected decline is probably temporary amid a chronic shortage of previously owned homes, which has be❀en supporting demand for new construction.

New home sales decreased 12.2% to a seasonally adjusted annual rate of 590,000 units last month, the lowest level since November 2022, the Commerce Department’s Census Bureau said Friday.

October’s sales pace was revised lower to 672,000 units from the previously reported 679,000 units.

Economists polled byꦓ Reuters had forecast new home sales, which account for 13ꦅ.4% of US home sales, rebounding to a rate of 685,000 units.

New home sales arꦡe counted at the signing of a contract, making them a leading indicator of the housing market.

They, however, can be volatile on a month-to-month basis. Sales increased 1.4% on a y🅷ear-on-year basis in November.

Monthly sales rose in the Northeast and the 🅠Mi👍dwest. They tumbled in the densely populated South and the West.

The supply of previously owned houses on the market remains well below the nearly 2 million units before the COVID-19 pandemic, according to the National Association of Realtors, which this week reported a modest rise in home resales in November.

The rate on the popular 30-year fixed-rate mortgage averaged 6.67% this week, the lowest level since June and down from 6.95% in the prior week, according to data from mortgage fin🌌ance agency Freddie Mac.

It has tumbled from a 23-year high of 7.79% in latℱe October, tracking the decline in US Trea𒉰sury yields.

That 🐈should help to stimulate home sales next year🎃.

The median new house price in November wa❀s $434,700, a 6% decline from a year ago🦩 as builders lower prices to woo buyers.

But house prices are probably not falling by that much, with othe𝔍r measures showing strong gains.

The bulk of the houses sold las🌳t month were in the $300,000 🎃to $749,000 price range.

There were 451,000 new homes on the market atꦡ the end of Nov𝕴ember, up from 440,000 in October.

At November’s sales pace it would take 9.2 months to clear the supply of houses on the market, up from 7.9 months in October.