The Commerce Department today reported that despite a slip in December, sales of new single-family homes topped one million units in 2003, establishing a new record for the third consecutive year.
Sales of new single-family houses in December slipped approximately 5.1 percent to 1.06 million units from November’s revised rate of 1.12 million on a seasonally adjusted basis, according to estimates released jointly today by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.
“The numbers, while amazing, should not be a surprise to most builders,” said Bobby Rayburn, president of the National Association of Home Builders and a home and apartment builder from Jackson, Miss. “The sales pace has been excellent throughout the last six months, primarily fueled by low mortgage rates and strong house price performance, and the market fundamentals are in place for this pace to continue into early 2004.”
December’s rate is 0.8 percent above the December 2002 estimate of 1.05 million units.
“The sales pace was strong throughout the fourth quarter, and while we anticipate a slight decline in 2004, it is predicated on a projected rise of mortgage rates as the year progresses, to 6.5 percent by year-end,” said NAHB Chief Economist David Seiders. “However, interest rates are currently lower than had been expected, and the rates are not projected to move up in the near future. Consumer confidence in housing is still strong, and housing continues to be an important contributor to our nation’s economy.”
Three regions recorded record-high sales for 2003. The Midwest had 189,000 sales, the South posted 512,000 sales and the West registered 306,000 sales. Sales in the Northeast topped 79,000, not a new record, but up 21.5 percent from 2002. For the month, the sales pace across all regions was mixed. The Northeast and Midwest posted 12.2 percent and 8.7 percent gains over the November rate, respectively. The South and West showed 8.1 percent and 11.2 percent declines, respectively.
The median sales price of new houses sold in December was $197,600, while the average sales price was $261,100.
The seasonally adjusted estimate of houses for sale at the end of December was 374,000, which represents a supply of 4.3 months at the current sales rate.
For all of 2003, there were approximately 1.09 million new homes sold, an approximate 11.5 percent increase compared with 973,000 houses sold during 2002, establishing a new record.
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