Earlier this week, a report from the National Association of Realtors showed that 2017 was the best year for existing home sales since 2006.
As it turns out, existing homes weren’t the only ones selling a recent record level last year.
New data from the Census Bureau and the Department of Housing and Urban Development shows that there were more new homes sold last year than in any year since 2007.
The latest data from the Census Bureau and HUD shows that there were an estimated 608,000 new homes sold in 2017. That’s up 8.3% from 2016’s total of 561,000.
That’s also higher than every other year since 2007, as seen in the chart below.
(Click to enlarge)
While last year’s total is the highest in a decade, it still obviously pales in comparison to the early-to-mid 2000s.
Last year’s total could have been even higher, but December’s total of new homes sold came in well below November’s total.
According to the Census and HUD data, sales of new single-family houses in December 2017 were at a seasonally adjusted annual rate of 625,000, which is 9.3% below the revised November rate of 689,000.
On the positive side, December 2017’s total was 14.1% above the December 2016 estimate of 548,000.
Additionally, the report showed that the median sales price of new houses sold in December 2017 was $335,400, while the average sales price was $398,900.
The report also showed that the seasonally adjusted estimate of new houses for sale at the end of December was 295,000, which represents a supply of 5.7 months at the current sales rate.
Zillow Senior Economist Aaron Terrazas notes that the new home sales data is encouraging, but cautions that it’s not all sunshine and roses either.
“Today’s numbers are not the way we would have liked to see 2017 end for the new home sales market, but nevertheless the year overall showed meaningful progress. New home sales activity began to move noticeably upward toward the end of 2017, ending the year at levels comfortably above where they were when the year began,” Terrazas said.
“And despite the monthly drop in sales, inventory of new homes available for sale rose by the largest amount since April 2006, an encouraging sign. Still, it has proven to be a two-step-forward, one-step-back process in getting building activity to where it really needs to be,” Terrazas continued.
“Big gains in one month are often revised down in the next, and progress has been frustratingly incremental instead of really breaking through. Prior to the recession, new home sales levels regularly exceeded 1 million or more per year. Those are the kind of levels we need to get back to in order to make a meaningful dent in the inventory crunch facing the market and to ease some of the pressure off of beleaguered homebuyers,” Terraza added.
“And rather than the speculation that fueled last decade’s boom and bust, building at that level today would be more squarely addressing true, fundamental demand in a healthy way,” he concluded. “Builders are certainly aware of this demand, and are doing what they can to meet it – but rising land, labor and lumber prices aren’t helping. It may not look like much progress these net few months, but we’re very slowly getting there.”