New home sales see steep drop in November
New home sales declined by double digits in November, according to the latest Monthly New Residential Sales report from the U.S. Census Bureau and the Department of Housing and Urban Development.
Sales of new single-family homes dropped 11% to a seasonally adjusted annual rate of 841,000 in November from the revised October rate of 945,000.
But the latest report is 20.8% above the November 2019 pace of 696,000.
The National Association of Home Builders (NAHB) said that housing affordability and a lack of supply have put a dent in new home sales.
“Though the market remains strong, the pace of sales pulled back in November as inventory remains low and affordability concerns persist as builders grapple with a shortage of lots, labor and building materials,” said NAHB Chairman Chuck Fowke.
The median sales price of new houses sold in November 2020 was $335,300, down 0.65% from the previous month. The average sales price was $390,100, edging upward 1.77% compared to October.
The seasonally-adjusted estimate of new houses for sale at the end of November was 286,000, representing a 4.1-month supply at the current sales rate. This marks a 13.9% increase from a 3.6-month supply reported in October.
“The home building industry saw a historic gap between the pace of new home sales and construction of for-sale single-family housing this fall,” said NAHB Chief Economist Robert Dietz. “As a result, the pace of new home sales was expected to slow to allow construction to catch up. This appears to have occurred in November as inventory of completed, ready to occupy new homes was down 43% compared to November 2019 at just 43,000 homes nationwide.”
Here’s how new single-family home sales performed by region:
- In the Northeast, new home sales declined 2.5% in November but are up 18.2% compared to the pace of November 2019.
- In the Midwest, sales plummeted 43.3% last month and declined 24.4% compared to November 2019.
- Sales in the South slipped 1.9% in November but have jumped 30.5% above the pace from last year.
- In the West, sales decreased 17.3% in November but increased 19.8% compared to the pace from November of last year.