New Home Sales November 2017

New home sales growth was strong in November 2017 according to data from the Census Bureau.  Rising to 733,000 units on a seasonally adjusted annualized basis, its 17.5 percent surge is the largest in 25 years.  Compared to a year earlier, transactions increased 26.6 percent. 

All four regions experienced gains in the period.  The West led the nation with a screaming uptick of 31.1 percent!  This single month’s improvement was better than the entire prior year which managed “just” 22.8 percent.  Transactions in the South (the largest region) increased an impressive 14.9 percent and gained 32.5 percent in the prior 12 months.  Northeast sales managed a respectable improvement of 9.5 percent in November; sales this portion of the country gained 14.9 percent in the past year.  Finally, signed contracts in the Midwest were up 6.9 percent in November and 16.3 percent versus a year ago. 

Price concessions may have helped boost transaction volume.  Both price proxies fell in the period.  At $318,700, the median home sold for $900 less than in October; this measure grew just $3,500 over the past year.  An average priced home set buyers back $17,600 less than the month before or $377,100; however, the average price increased faster than the median price over the past year as it edged higher by $13,700. 

Housing continues improving along with our economy; of course, these are interrelated.  Many people get to work once builders decide to erect a home.  State and local bureaucrats, bank employees, construction workers, drivers, real estate professionals, and countless others are needed to complete the home and its sale.  Their paychecks go into the economy as they consume, and the virtuous period of the business cycle moves forward.  America is experiencing an expansion, and this indicator benefits from the nation’s growing output.