Sales of newly-built, single-family homes grew 5.2% on a monthly basis in November to a 592,000 seasonally adjusted annual rate according to estimates from the Census Bureau and HUD. The growth in November is consistent with rising home builder confidence and an expectation of sales growth in 2017. The November rate was the second highest sales pace since the end of the recession.
New home sales for November, on a year-to-date basis, were 12.7% higher than this time last year. Inventory remains tight at a 5.1 months’ supply, mirroring ongoing limited inventory conditions in the existing home market.
Rising interest rates in 2017 will damper some growth for sales of new and existing home sales, but favorable demographics, ongoing job creation, and rising wages will cause new home sales to continue to expand next year. Recent construction data has found a broadening of the mix of homes being constructed, and that development will likely have an impact on median new home prices next year.