New home sales gain ground in December

In the West, December 2022 new homes sales plummet nearly 50% on a year-over-year basis.
Single family home
Despite December's rise, new single-family home sales are down drastically from a year ago.

Sales of new single-family homes ticked upward in December 2022, the U.S. Census Bureau and the U.S. Department of Housing and Urban Development reported this morning.

According to the latest Monthly New Residential Sales, sales increased 2.3% to a seasonally adjusted rate of 616,000 compared to the revised November 2022 rate of 602,000.

“Builder incentives and declining mortgage rates during the month of December helped push new home sales up for the month,” said Jerry Konter, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Savannah, Ga. “However, because of higher construction costs and decreasing affordability, sales are down more than 25% compared to a year ago.”

The latest report illustrates the status quo of home sales and is 26.6% below the December 2021 estimate of 839,000.

In total, an estimated 644,000 new homes were sold in 2022, which is 16.4 percent below the 2021 figure of 771,000.

The median sales price of new houses sold in December 2022 was $442,100, declining 3.6% from a median price of $459,000 in November 2022. On a year-over-year basis, the median sales price is up 7.8% from December 2021.

“In a further sign of decreasing housing affordability, even though the median home price is down for the second straight month, it is still up 7.8% compared to last year,” said Danushka Nanayakkara-Skillington, NAHB’s assistant vice president for forecasting and analysis. “Elevated inventories are another concerning sign of a soft market.”

The average sales price was $528,400 for the month, nearly flat compared to an average sales price of $528,600 in November. The average price for December is up 7.6% on a year-over-year basis, however.

The highs and lows of December single-family home sales. (Click to enlarge.)

Here’s how sales of new single-family homes performed on a regional basis:

In the Northeast, December sales were down 19.4% from the prior month and plunged 26.6% on a year-over-year basis.

In the Midwest, sales jumped ahead 35.2% but are down 14.1% from the same period a year ago.

In the South, December sales increased 6.5% but diminished 17.5% from December 2021 sales.

In the West, sales dropped 15.3% and plummeted 49.6% on a year-over-year basis.

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