Washington (AFP) – Sales of new US homes jumped in 2023, government data showed Thursday — a result that reflects a lack of inventory in the existing homes market, as mortgage rates remained elevated.
An estimated 668,000 new homes were sold last year, representing a 4.2 percent rise from the 2022 figure, the Commerce Department said.
December sales beat expectations to log a seasonally adjusted annual rate of 664,000 — 8.0 percent above the revised November pace.
Compared to the same month a year ago, December’s pace was up 4.4 percent.
Key factors encouraging buyers were a dip in mortgage rates at the end of last year as well as the continued lack of supply in the existing home market, analysts said.
With mortgage rates still elevated, homeowners who locked in much lower rates previously have been dissuaded from putting their properties up for sale, nudging buyers into the new homes sector.
In December, the median sales price of new homes slipped to $413,200, its lowest level in two years.
“The December decline in prices in part reflects ongoing builder discounts,” said Nancy Vanden Houten, lead US economist at Oxford Economics.
“The sizes of new homes have been trending lower as builders look to attract buyers with more moderate incomes,” she added in a note.
For the full year, the median cost was $427,400, lower than in 2022 as well.
“New home sales were remarkably resilient in 2023, despite the slump in overall housing demand,”said Pantheon Macroeconomics in a recent report.
Figures for new sales can be an “unreliable guide” to housing sector activity, noted Ian Shepherdson of Pantheon Macroeconomics.
But the supply of new homes remains especially high compared with the existing home supply, and above pre-pandemic norms.
“That gives new home sales plenty of scope to climb further in the near term if, as we expect, lower mortgage rates continue to drive a recovery in demand,” he said.
