New Home Sales Price History

The price distribution of new home sales has changed markedly over the last ten years. Indeed, new home prices have increased, due to market shifts and higher regulatory costs.

The following analysis uses data from the Quarterly Sales by Price and Financing reported by the U.S. Census Bureau. As shown in the following graph, the number of new homes sold for less than $250,000 had been declining prior to the recession. Sales in this class have not reached back to the levels set in 2006, especially for homes with prices below $149,000. New homes sold for $150,000 to $199,999 (green) and $200,000 to $249,000 (purple) declined to a cycle low during the recession, and since then have been on a slow, recovering pace.

A second group illustrates new homes sold above $250,000, which are the main growth drivers in the market. Over the last ten years, all of the five categories reported below experienced dramatic declines during the recession and then increased gradually since 2011. Among the five categories, new homes priced between $300,000 and $399,000 had the highest volume before the Great Recession and have experienced the fastest recovery since that time.

 

Clearly, after the recession new homes sold at lower prices have not grown as fast as other parts of the market. As the graph below illustrates, there has been a notable shift from new homes sold in the below $200,000 class to homes priced between $200,000 and $750,000.

This market shift is due to both demand-side factors (weakness among first-time buyers), as well as supply-side cost constraints, including rising regulatory burdens.

 



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5 replies

  1. That is hilarious, saying a nearly decade old bull market across all sectors and record high value in the S&P, DOW, NASDAQ, REITs (securitized real estate)… they must all be hitting record levels from too much regulation! You guys are way too politicized. The FOX news of housing analysis.

  2. Please stop suggesting that regulatory issues are the prime driver of housing prices. Your own research indicates that 70 to 75% of the cost increases are non-regulation based. Mentioning all cost drivers would lead to a more honest discussion

  3. Housing affordability to be focused on-cheaper construction design

  4. You have shared a fabulous information. Its quite informative and its provide a lot of help. Thanks for sharing it

  5. Thank You for the article. Gives us a great insight as to how the New Construction market is going. Will share link with customers I keep informed.

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