December new residential home sales drop 9.3%

The decline was 'not unexpected' after November's fast sales pace left fewer homes on the market

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After a strong November, December new residential home sales fell a little short — a soft end to an otherwise strong year.

According to the U.S. Census Bureau and the U.S. Department of Housing and Urban Development (HUD), new single-family home sales declined to a seasonally adjusted rate of 625,000 — a 9.3 percent month-over-month decrease and a 15.0 percent year-over-year gain in home sales.

The estimate of new homes for sale at the end of December was 295,000, which represents a 5.7-month supply at the current sales rate.

Realtor.com senior economist Dr. Joseph Kirchner said the decline was expected since November’s red-hot sales pace left fewer homes available for sale.

“December’s drop in new home sales was not unexpected,” he said in an emailed statement. “After sales skyrocketed in November — with a record 17.5 percent increase — there were hardly any new homes left on the market to buy in December.

“The good news is new home permits and starts have been increasing over the last few months, so the supply of new homes should be up slightly for the spring market.”

Other data from the Census Bureau and HUD:

  • The median sales price was $398,900.
  • An estimated 608,000 new homes were sold in 2017 — a 8.3 percent year-over-year increase.
  • The Midwest experienced the greatest dip in residential home sales (-10.00 percent), followed by the South (-9.8 percent), West (-9.5 percent), and Northeast (-2.4 percent).

The Census Bureau and HUD use sample surveys to collect data for their home sales, which means this data is subject to sampling variability as well as the typical statistical variance. The survey is based on a sample of houses pulled from building permits. “Sales” are defined as deposits taken or sales agreements signed, not necessarily closings.

Email Marian McPherson.