The United States Census Bureau and the Department of Housing and Urban Development jointly released their New Home Sales report for the month of December, and it showed that signed contracts on new homes rose 8%. Year over year, New Home Sales were up 4.4% in this reporting period.
The median home price was reported at $413,200, which is down 3% from November, and down 14% from this time last year, but remember this can be misleading as it is due to the mix of sales. Because if more, lower-priced homes sell the median price will shift closer to a lower number, and for the period being reported on, we saw a big increase in the $300-400k home price category, which caused the median price to move lower.
The National Association of Realtors released its Existing Home Sales report, and it showed that closings on existing homes fell by 1% in December. Year over year, sales were down 6.2%. Since this report is for the month of December, there is a good chance that it encompasses buyers who were shopping in October and November when rates peaked at 8%. Since rates have slid a leg lower and we are starting to get past the normal winter slowdown in sales, there is a good chance that this report will gain some steam and will pick up from here.
Speaking of sales activity, Lawrence Yun, the Chief Economist for NAR, said, “The latest month’s sales look to be the bottom before inevitably turning higher in the new year. Mortgage rates are meaningfully lower compared to just two months ago, and more inventory is expected to appear on the market in upcoming months.”
Inventory levels which decreased 11.5% in the month to 1 million are still very tight. At the current pace of sales, there is about 3.2 months’ supply of homes, which is tight, because around five months is considered normal.
50% of homes sold in less than 30 days and homes remained on the market on average for 29 days, however not too long ago this metric was at 22 days so there is a slight slowdown here, but this type of slowdown is normal for this time of year.
Sources :
https://bit.ly/2MJU6mf
https://bit.ly/3Kx5oIL
