Key Takeaways from the December New Home Sales Report
- December new home sales fell 10.4 percent from November, to 536,000 units (SAAR), according to the Census Bureau.
- The number of new homes on the market in December increased 4 percent from November to 259,000 units (SAAR), the highest level since August 2009 but less than half its pre-crisis peak.
- The median price of new homes sold in December increased 4 percent from November, but new home prices appear to have stabilized during the second half of 2016.
New home sales fell 10.4 percent in December to 536,000 units at a seasonally adjusted annual rate (SAAR), the largest month-over-month decline since March 2015, according to the U.S. Census Bureau (figure 1). Over the year, new home sales ended 2016 down 0.4 percent, only the second time in 2016 and the third time in the past 30 months in which new home sales have declined compared to a year earlier.
Unseasonably cold weather across much of the country in December likely kept some home shoppers indoors, slowing the pace of new home sales and potentially pushing some sales farther down the road into January and February. The Midwest, which experienced some of the country’s coldest temperatures in December, experienced the largest month-over-month drop in new home sales (-41 percent from November to 49,000 units SAAR). In the more temperate West, sales fell 1.3 percent from November, to 156,000 units (SAAR).
The number of new homes on the market rose 4 percent from November, to 259,000 units (SAAR), the highest level since August 2009. But despite the modest increase at the end of 2016 – driven mostly by seasonally slow demand – the number of new homes currently on the market is lower than it was at any point between February 1983 and August 2009.
The median seasonally adjusted price of new homes sold in December rose 4.6 percent from November and 7.5 percent from the end of 2015 to $318,800. Price growth among new homes sold stabilized during the second half of 2016: Between January and June, the median seasonally adjusted price of new homes sold rose 8.8 percent ($296,400 to $322,300). Between June and December, the median sales price fell 1.1 percent.