Published on March 14, 2019
Written by The Servion Group
Sales of new homes in the U.S. rose in December at the fastest pace in seven months, a sign that the real estate market is benefitting from lower mortgage rates.
Data released by the Commerce Department on March 5 show new home sales rose 3.7 percent in December to a seasonally adjusted annual rate of 621,000. November’s sales were revised to 599,000.
For the entire year of 2018, new-home sales rose 1.5 percent. June brought a significant drop in purchase activity as higher mortgage rates at that time made homes less affordable. Mortgage rates peaked in November and have fallen since, which appears to have allowed sales to rebound.
Price growth stalled at the end of the year. The median sales price of a new home in December was $318,600, down 7.2 percent from a year earlier.
In December, sales of new homes increased in the Northeast, South and West. But purchases fell in the Midwest.
Industry watchers say 2018’s sales gains could point to a strong 2019 as well. Purchases of new homes not yet under construction surged 22.4 percent in December. Additionally, affordability pressure has eased, with average 30-year mortgage rates hovering around 4.35 percent, down from around 5 percent at the beginning of November.
Source: Associated Press