Synopsis
Sales of new single-family homes in the United States fell 1.7% in December, but builders reduced inventories, which could allow more housing starts. The supply of housing under construction has reached its lowest level in almost 4 and a half years. At the same time, the fall in mortgage rates offers potential for recovery in the real estate market.
P.A.New home sales in the United States saw a slight decline in December. However, manufacturers have managed to reduce their unsold stocks. Sales of new single-family homes in the United States fell in December, but builders made progress in reducing bloating inventories, potentially allowing them to launch more new housing projects.
New home sales fell 1.7% to a seasonally adjusted annual rate of 745,000 units, the Commerce Department’s Census Bureau reported Friday. Sales increased at a rate of 758,000 units in November compared to 656,000 in October. The data was delayed by the government shutdown last year.
New home sales represent a small share of U.S. home sales and tend to be volatile from month to month. They are counted when signing a contract. New home sales increased 3.8% on an annual basis in December.
The inventory of new housing fell to 472,000 units in December from 485,000 units in November. The inventory of homes under construction was the lowest in nearly four and a half years. At the rate of December sales, it would take 7.6 months to clear the supply of new homes on the market, compared to 7.7 months in November.
The median price of new homes increased 4.2% to $414,400 in December from a year earlier.
The real estate market could benefit from a boost mortgage rates. The average rate on the popular 30-year fixed-rate mortgage fell to 6.01% this week, the lowest level since September 2022, from 6.09% last week, according to data from mortgage finance agency Freddie Mac.
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