New home sales in December were at a seasonally adjusted annual rate of 811,000 – an increase of 11.9% compared with November but a decrease of 14.0% compared with December 2020, according to estimates from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.
Roughly 762,000 new homes were sold in 2021 – a decrease of 7.3% compared with 2020.
The median sales price for a new home sold in December was $377,700. The average sales price was $457,300.
As of the end of the month there were about 403,000 new home available for sale in the U.S., which was a six-month supply at the current sales rate.
“New-home sales ended the year on a strong note, coming in above consensus expectations as buyers rushed to lock-in low rates before they rise,” says Odeta Kushi, deputy chief economist at First American, in a statement. “Months’ supply declined to its lowest level since May 2021.”
Kushi says part of the reason new home sales decreased in 2021 is because supply side constraints slowed production.
“Builders continue to grapple with supply chain issues and higher material costs, which are delaying construction,” she says.
“The share of completed homes/ready to occupy inventory in December was 9.7 percent, which is down from 13.7 percent one year ago but up from last month,” Kushi says. “While the share of new-home inventory that is not started increased from 22 percent to 25 percent.”
“The outlook for new-home sales is largely dependent on the amount of new homes being built and the demand for new homes,” Kushi adds. “Demand for new homes will remain strong due to the millennial demographic tailwind. The lack of existing homes for sale nationwide to meet this demand is supportive of new construction. Indeed, you can’t buy what’s not being built.”
Photo: Todd Kent