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In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s update discusses new home sales.
- The figures for new home sales, contracts and not actual closings, released today were weak at first blush, but reflected core strength.
- New home sales in December fell 7.3% from November to 369,000. However, the November figures were revised upward by 9.7%, while the October figure was revised upward as well.
- Relative to last year, new home sales in December were 8.8% stronger and the median price was 13.9% higher.
- While building has improved in recent quarters, inventories remain tight. Increased demand drove the months supply below 5 in recent months and despite the down tick in sales, that figure was 4.9 in December, the 11th consecutive month below a supply of 5 months.
- Slim supplies relative to demand will help to support stable price growth, but new sales are limited by supply as well, so expect this figure to remain muted in the near term until new construction can support more new contracts.
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