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New-home sales decline for fourth consecutive month in November
New-home sales declined 11 percent from October's downwardly revised rate of 945,000 annualized unites to 841,000 units in November. In a new NAFCU Macro Data Flash report, NAFCU's Nadir Tekarli noted that although this is the fourth consecutive decline, sales were up 20.8 percent versus November 2019.
"New-home sales are generally volatile from month to month, but four consecutive months is a trend," said Tekarli, NAFCU’s research assistant. "Regardless, new home sales levels are still near their highest level since 2007."
The median new-home price, non-seasonally adjusted, decreased slightly from $337,500 in October to $335,300 in November. The month's prices were up 2.2 percent from a year ago.
Sales fell in all four regions during the month, down 43.3 percent in the Midwest followed by the West (-17.3 percent), the Northeast (-2.5 percent), and the South (-1.9 percent). Compared to a year ago, sales rose in the South (+30.5 percent), the West (+19.8 percent), and the Northeast (+18.2 percent), but fell in the Midwest (-24.4 percent).
Based on current month sales, there were 4.1 months of supply in November, up 0.5 months from October. The number of unsold homes left on the market was up 1.8 percent at 286,000 units, representing a 11.2 percent reduction from year-ago inventory levels.
"Tailwinds include rock bottom interest rates, the recently-passed stimulus package, and the light at the end of the tunnel regarding the COVID crisis," Tekarli added. "In addition, months of supply has increased for two consecutive months, housing starts are at their highest level since 2007, and residential investment remains strong, which should alleviate some supply constraints and slow the rise of the median sales price.
"NAFCU expects new-home sales to cool slightly through the winter before increasing again in mid-2021," Tekarli concluded.