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Lending

New home sales fell 7% in December

Market inventory reaches a 5-month supply

house construction
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New home sales fell in December, falling 7% below November’s revised rate of 445,000 sales to a seasonally adjusted annual rate of 414,000 units, the Commerce Department reported Monday.

However, December statistics are still 4.5% above the December 2012 estimate of 396,000 units.

Additionally, the median sales price of new houses sold in December 2013 fell to $270,000, while the average sales price for the same month came in at $311,400.

The estimate of new houses up for sale at the end of December came in at 171,000, representing a 5-month inventory supply at the current sales rate.

Meanwhile, 428,000 new homes were sold in 2013, which is 16.4% above the 2012 figure of 368,000 units.  

Despite the dampening numbers, Jeff Taylor, managing partner at Digital Risk, is still very bullish on new home sales going into 2014 since you still have historically low interest rates and you will get more for your money.

"I think last year the market got so hot nationally that a lot of investors bought a lot of these houses and started to put them on the market, but since they were not doing significant repairs to the houses, people took a step back from buying them," Taylor said. 

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