The decline in interest rates during the final weeks of 2023 spurred buyers into action and contributed to a surge in new home purchases. According to recently published figures by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, sales of newly constructed, single-family homes in December increased by 8.0% to a seasonally adjusted annual rate of 664,000, following an upward revision of November’s data. Compared to the same period a year ago, the pace of new home sales in December rose by 4.4%.
According to the NAHB, A new home sale occurs when a sales contract is signed, or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the December reading of 664,000 units is the number of homes that would sell if this pace continued for the next 12 months.
New single-family home inventory in December remained elevated at a level of 453,000, up 0.4% compared to a year earlier. This represents an 8.2 months’ supply at the current building pace. A measure near a 6 months’ supply is considered balanced. Completed, ready-to-occupy inventory, 88,000 homes in December, is up 22.2% from a year ago. However, that inventory type remains just 19% of total inventory.
The median new home sale price in December was $413,200, edging down 3.0% from November, and down 13.8% compared to a year ago.