US New Home Sales Rise For Second Straight Year In 2024

Sales of new US homes ended 2024 on a high note in December as customers took advantage of incentives from builders, leading to a second straight year of increased purchases.

For the full year, customers purchased 683,000 homes, up about 2.5% from 2023’s total.

Source: Bloomberg

The annual pace of new single-family home sales accelerated 3.6% to 698,000 last month (better than the 2.4% MoM rise expected), reflecting a sharp advance in the West…

Source: Bloomberg

Median sale prices, meantime, rebounded despite a gradual cooling trend, increasing 2.1% to $427,000. Prices continue to pinch consumers, having risen nearly 30% since the end of 2019.

New home prices are once again above those of existing homes… barely…

As Bloomberg reports, the market for new homes has held up better than that for existing ones thanks in part to widespread use by builders of incentives, including mortgage rate “buydowns” in which they make up-front payments on customers’ behalf to lower mortgage costs.

More than 60% of builders report using sales incentives, data from the National Association of Homebuilders show, while 30% say they are cutting prices. Mortgage rates rose to 7% earlier this month for the first time since July.

However, the drop in rates has stabilized here suggesting this rebound is not likely to accelerate…

Source: Bloomberg

Finally, unlike the existing-home market, where the available inventory is only slowly rebuilding from historic pandemic-era lows, builders have plenty of new homes to show customers. The supply on the market rose to 494,000 in December, the most in 17 years.