Census and HUD reported new home sales for December were down7% to an annual rate of 414,000. The first estimate of 2013 annual sales rate shows sales advancing 16.4% and the highest since 2008. In addition, the fourth quarter new homes sales were virtually the same as the second quarter of 2013.
The NAHB/Wells Fargo Housing Market Index showed a similar anticipatory pattern of falling in the spring followed by a decline in sales in the summer. Likewise, the HMI faltered a bit in the fall followed by sales falling slightly from third to fourth quarter.
Regionally, the Northeast declined 36.4%, which may have been a result of brutally cold and snowy weather. The South and West also declined 7.3% and 8.8% respectfully, both to levels seen in the second quarter. The Midwest rose 17.6% on a monthly basis but November was unusually low.
Inventory fell to 171,000 or down 2.8% but because of the slower sales pace, the month’s supply increased to 5 months. The number of completed homes for sale remains near historic low levels at 40,000 compared to a more normal level of over 100,000. Median sales prices rose 4.6% with no particular shift in the distribution of sales price.
The momentary dip is more likely a residual effect of the jump in interest rates, unusual weather and a readjustment to more sustainable level of sales. NAHB expects new home sales in 2014 to pick up again and reach 600,000 for the year.