First Time Ever: Average New Home Prices Soar Past $400k
Over the past 7 years, a renewed faith in the American economy (starting back in 2010) and now continuing through 2017, has resulted in significant increases to the selling price of homes.
According to just released Census figures in its October 2017 New Residential Sales report, new single-family home sales are up 6.2 percent month-over-month. The Census Bureau’s numbers declared an average home sales price of $400,200 - the highest since March 2007’s average of $329,400.
There were approximately 235,000 new single family homes for sale in the US in December 2016. This is slightly lower than the 2015 value of 237,000, and 53% lower than the 2007 inventory of 496,000.
Also during the calendar year of December 2016, there were approximately 563,000 new homes sold. That’s an increase of 12.2% from the 501,000 homes sold in 2015. With this information, concerning yearend inventory of new homes, together with the December annualized rate of new home sales it is possible to determine the supply of new homes on the market. This value is calculated by taking the homes for sale in December (235,000) and dividing it by the December annualized rate of sales (536,000). This data shows us there was less than a six-month supply of new homes.
For 2017, the sales of new single-family homes in October were at a seasonally adjusted annual rate of 685,000. The estimate of new homes for sale at the end of October was 282,000 which represents a 4.9-month supply at the current sales rate.
In an emailed statement, Realtor.com Chief Economist Danielle Hale said, “The pick-up in new homes sales should improve builder confidence and lead to more home construction, offering home buyers additional options and creating opportunities for current owners to trade into new homes, potentially unleashing existing home inventory.”
Additional data from the Census Bureau and HUD included*:
--The Northeast led the way in new residential home sales - 30.2% month-over-month increase
--The Midwest experienced the second highest rate of month-over-month growth at 17.9%
--The West and South came in with a 6.4% and 1.4% growth month-over-month, respectively
*Article graph credit: Daniel Barnes/Unsplash
- Additional data: MONEY-ZINE, US Census Bureau, and HUD
*(number of homes sold)