The Commerce Department’s Census Bureau reported Friday that December brought a modest decline in new single-family home purchases nationwide, though construction companies successfully worked down their surplus inventory levels.
December’s new home purchases decreased by 1.7% to a seasonally adjusted annual pace of 745,000 units. This followed November’s improved rate of 758,000 units, which had risen from October’s 656,000. Government shutdown delays from last year postponed the release of this data.
While new home purchases represent only a fraction of total residential real estate transactions and typically show monthly fluctuations, they provide important market insights since they’re recorded when contracts are signed. Compared to the same period last year, December’s new home purchases climbed 3.8%.
Available new home inventory dropped to 472,000 units in December, down from November’s 485,000 units. The number of homes currently being built reached its lowest point in almost four and a half years. Based on December’s purchasing rate, clearing the current supply of new homes would require 7.6 months, an improvement from November’s 7.7-month timeline.
The typical price for a new home rose 4.2% year-over-year to $414,400 in December.
Mortgage interest rates could provide some relief for the housing sector. Freddie Mac data indicates that 30-year fixed mortgage rates dropped to 6.01% this week, marking the lowest point since September 2022 and down from the previous week’s 6.09%.
