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Economy in Brief

U.S. New Home Sales Edge Down; Revisions Suggest Weaker Trend
by Gerald D. Cohen  January 27, 2020

• New single-family home sales tick down to 694,000 in December, meaningfully weaker than the expectations of 727,000.

• Downward revisions to October and November leave Q4 unchanged from Q3.

Sales of new single-family homes declined 0.4% in December to 694,000 units at a seasonally adjusted annual rate (+23.0% year-on-year). The Action Economics survey had expected sales of 727,000 in December. Continuing a trend from the previous report, the prior two months were revised meaningfully lower. November sales were revised to 697,000 from 719,000 while October is now 705,000; it was 710,000 and originally reported at 733,000. This left fourth quarter sales averaging 699,000, essentially unchanged from the Q3 average of 698,000. For the entirety of 2019, sales averaged 682,000 meaningfully higher than the 2018 level and the strongest year since 2007. However, sales are still well below the over 1 million average pace seen in the first half of the 2000s.

The median price of a new home rose to $331,400 in December (0.5% y/y). The average price of a new home increased to $384,200 (0.7% y/y). Home prices, which are not seasonally adjusted, have been rangebound for the last few years.

Sales activity was mixed across the country in December, with a jump in the West -- the second largest sales region -- more than offset by a drop in the South -- the largest region, representing over 50% of sales.

The months' supply of homes on the market increased to 5.7 months in December from 5.5 months in November. Still it is well below the eight-year high of 7.4 months seen in December 2018.

The data in this report are available in Haver's USECON database. The consensus expectation figure from Action Economics is available in the AS1REPNA database.

U.S. New Single-Family Home Sales (SAAR, 000s) Dec Nov Oct Dec Y/Y % 2019 2018 2017
Total 694 697 705 23.0 682 615 617
  Northeast 30 34 21 11.1 29 32 40
  Midwest 76 69 69 16.9 71 75 72
  South 347 410 416 -1.1 396 348 341
  West  241 184 199 99.2 185 160 164
Median Price (NSA, $) 331,400 320,900 323,400 0.5 320,700 326,400 323,100
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