Sales of new U.S. single-family homes jumped by over 10 percent over the month in December to a nine-month high, boosted by a shortage of previously owned houses on the market.
While that’s a substantial bump from November’s annual rate of 725,000 units, it’s around 14 percent lower than the December 2020 figure of 943,000. A total of 762,000 new homes were sold in the United States in all of 2021, compared to 822,000 in 2020, a decrease of around 7.3 percent.
Overall homebuyer demand in the United States has been buoyed by historically low mortgage rates, while a shortage of previously owned housing stock has helped underpin new home sales.
The inventory of unsold existing homes fell to an all-time low of 910,000 units in December, according to NAR. This represents around 1.8 months of stock at the current monthly sales pace—also a record low.
“December saw sales retreat, but the pull back was more a sign of supply constraints than an indication of a weakened demand for housing,” Lawrence Yun, NAR’s chief economist, said in a statement. “Sales for the entire year finished strong, reaching the highest annual level since 2006.”
Yun expects existing-home sales to slow somewhat in the months ahead as mortgage rates rise.
“I also expect home prices to grow more moderately by 3 percent to 5 percent in 2022, and then similarly in 2023 as more supply reaches the market,” he predicted.
“House price levels remained elevated in November, but the data indicate a pivot,” Will Doerner, supervisory economist in FHFA’s Division of Research and Statistics, said in a statement.
“The last four months reflect average gains of 1.0 percentage point, down from the larger prior changes during the spring and summer months. This new trend is a welcome shift but still twice the monthly average we have seen in the last 20 years, which echoes concerns about access and affordability in housing markets,” Doerner added.
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