New home sales for November declined a statistically insignificant 2.1% from an unusually high October. The average for the first two month of the fourth quarter is the highest since mid-2008. The previous three months were also revised upward by a total of 88,000 sales. The report was mixed regionally with the Northeast and West rising 15.2% and 31.1% respectively. The Midwest and South were down 26.55 and 9.1% respectively. The decline in the South, the largest region in terms of sales, was from a high in October of 287,000, the highest since April 2008.
Inventories dipped to 167,000 representing a 4.3 months supply and the lowest months’ supply level since the first quarter of 2013. Builders continue to behave prudently and banks continue to hold tight on lending to builders for acquisition, development and construction loans.
The steady increase in new homes sales after a pause in mid-year supports the expected sales of 600,000 new homes in 2014.