Sales of new homes rose in November to an annualized rate of 719,000, according to the Census Bureau and the Department of Housing and Urban Development.
According to the Census data, the November pace moved forward from October’s pace, which was downwardly revised from 738,000 to 710,000.
November’s total, which is 1.3% above October’s pace, was 16.9% higher than November 2018, when new home sales sat an annualized rate of 615,000.
“In a year that’s been choppy at times, new home sales more than pulled their weight in the back half of 2019,” Zillow Economist Matthew Speakman said. “Even though some of the starch from prior months’ strong initial data has been washed out through downward revisions, 2019 will go down as the best year for new home sales since before the Great Recession.”
During November, the seasonally adjusted estimate of new homes for sale by the end of the month was 323,000. This represents a supply of 5.4 months at the current sales rate, rising from the previous month.
The median sales price of new homes was $330,800, while the average sale price was $388,200, according to census data.
As the new decade approaches, Speakman said there are many signals that should inspire confidence in the housing market, including significant improvements in homebuilding.
“Homebuilder optimism is at a two-decade high, driven by a growing sense that strong demand for new homes will persist. And construction levels have accelerated in recent months, blowing past expectations and reaching 12-year highs in both starts and permits at different times in the last three months,” Speakman said. “Notable headwinds remain, but steady construction rates and new home sales volume should continue to boost the housing market into the New Year.
Navy Federal Credit Union Corporate Economist Robert Frick said given the rise of home starts and permits in the fall, inventories should swell next year. Nevertheless, he warns the nation’s homebuilders still have a long way to go.
“We are still building at a pace at least 200,000 less than historical averages, and that relatively low supply and high and pent-up demand will keep home prices rising and out of the reach of many first-time homebuyers,” Frick said. “But the improvement is clear, and if home builders move to building cheaper homes, in a few years we may return to a healthier housing market for both buyers and sellers.”