New-home sales fell in December 2019 by 0.4% to 694,000, according to the U.S. Census Bureau. The Bureau also reported that November’s estimated 719,000 home sales have been revised to just 697,000.
December’s data represents a 23% year-over-year increase from December 2018 and 2019 saw 10.3% more new home sales than the prior year.
The median-sales price of new homes in December 2019 was $331,400 and the average sales price was $384,500. There was an estimated supply of 327,000 new homes during the month, representing a 5.7 months supply.
According to the Bureau, the average new-home sales price rose 8.16% since January 2019 ($305,400).
"For new home sales, a step back in December isn't anything to worry about. Hundreds of thousands of homes will be built this year, and they'll be sold quickly because there's a shortage of new and used homes for sale,” said Holden Lewis, Home and Mortgage Specialist at NerdWallet. “Look for new home sales to rebound in a big way this spring."
The Mid-West and West regions posted monthly increases in new-home sales at 10.1 and 31%, respectively. The Northeast saw new-home sales fall 11.8% and the South recorded a drop of 15.4%.
Len Kiefer, however, tweeted Monday following the announcement that 2010-2019 saw the fewest number of new-homes sold since the 1960s.
U.S. new home sales by decade
from 2010 through 2019 sales were quite low, but finish the decade closer to historical averages pic.twitter.com/MTqHJjOSM1
— (@lenkiefer) January 27, 2020
The Bureau reported in January that total housing starts rose 16.9% in December 2019 from November 2019 to 1.6 million—an annual increase of 40.8%.
Single-family housing starts rose 11.2% in December 2019 from November to 1.05 million, while permits fell slightly from the prior month.
“As close to 5 million millennials turn 30 this year and enter their prime home-buying stage, demand for housing is ramping up. Riding a wave of favorable financing, younger buyers have embraced homeownership, drying housing inventory to two-year low,” said realtor.com’s Senior Economist Geroge Ratiu. “With the generation’s rallying crying that there are not enough affordable homes, it is clear that there is ample room in the market for a significant increase in new construction, especially in the entry- and mid-level price segments.”