November 2019 New Home Sales

Sales of new homes improved 1.3 percent to 719,000 units on a seasonally adjusted annualized basis in November 2019 according to the Census Bureau.  However, the uptick did require one caveat, a 23,000 unit downward revision to October’s tally to 710,000.  Year-over-year, transactions are up 16.9 percent. 

Regional data were mixed but skewed higher.  First the bad news.  Sales in the South, the largest region, fell 4.1 percent, but this portion of the nation is up 9.0 percent in the past year.  Midwest transactions were virtually unchanged and are down 1.4 percent from a year earlier.  Now things start looking better.  Volume improved 7.5 in the West and are up 47.9 percent year-over-year, well ahead of any other region.  Finally, the Northeast may have had snow on the ground, but sales’ rate of change was white-hot, reaching 52.4 percent!  This was enough to keep the year-over-year tally in the black by 6.7 percent. 

Price proxies improved as well.  The average price paid for a new home moved up to $388,200 for a gain of $10,300 or 2.7 percent.  Similarly, the median priced home went for $330,800 which is up $13,900 or 4.3 percent more than in October. 

Atlas watches this segment of the housing market because of how the indicator is constructed.  It is based on signed contracts and not closed sales.  This means many of the homes sold have not been completed (some haven’t even been started) and require additional economic output before they are ready to be occupied.  For now, new home sales suggest more building is required soon, and those workers on the site will have future income to spend.