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US new home sales trend higher in November

Sales of newly built, single-family homes increased 1.3 per cent to a seasonally adjusted annual rate of 719,000 units in November, off a downwardly revised October reading, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. In a sign that new home sales are on an upward path, this is the fourth consecutive month that sales topped 700,000.

“Fueled by the limited number of resales available for purchase, low interest rates and low unemployment, new home sales are finishing the year strong,” said Greg Ugalde, chairman of the National Association of Home Builders, and a home builder and developer from Torrington, Conn.

“With almost all the 2019 data in, the housing rebound continued through second half of the year,” said NAHB Chief Economist Robert Dietz. “New home sales are running 10 per cent higher than in 2018, and high levels of builder confidence point to production gains going into 2020.”

A new home sale occurs when a sales contract is signed or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the November reading of 719,000 units is the number of homes that would sell if this pace continued for the next 12 months.

Inventory has been trending lower over the course of 2019 and now stands at a healthy 5.4 months’ supply, with 323,000 new single-family homes for sale. Of that total, just 76,000 are completed, ready to occupy. The median sales price was $330,800. The median price of a new home sale a year earlier was $308,500.

Regionally, and on a year-to-date basis, new home sales are 14.5 per cent higher in the South and 12 per cent higher in the West. Sales are down 10.4 per cent in the Northeast and 7.6 per cent in the Midwest.