After increasing by a modest 0.4 percent in October, new home sales saw a 12.4 percent increase in November to a seasonally adjusted rate of 744,000, the U.S. Census Bureau and Department of Housing and Urban Development announced Thursday.
The jump in sales is still 14 percent lower than the November 2020 estimate of 865,000 sales.
Meanwhile, the median sales price of new houses sold in November 2021 was $416,900, up from the October median price of $407,000. The average sales price was $481,700, up from the October average of $477,800.
New houses for sale at the end of November were estimated at 402,000, representing a supply of 6.5 months at the current sales rate.
Realtor.com manager of economic research George Ratiu credited the growth to mortgage rates remaining low as the holidays approach, low interest rates, and low inventory on existing homes.
“New home sales advanced for the third consecutive month in November, as still-low mortgage rates and interest rates motivated buyers to close before the winter holidays,” Ratiu said in a statement. “With tight inventory for existing homes frustrating many buyers, low interest rates have given many the leeway in their budget to consider new homes.”
Ratiu said the outlook for builders was optimistic for the next six months, but that the rising costs of materials and inflation rates would lead to higher prices for buyers.
“Strong demand for housing keeps the homebuilders’ outlook for the next six months upbeat,” he said. “However, resurgent lumber prices and accelerating inflation are pushing builders to pass those costs on to consumers. This affordability wedge comes as builders seek to overcome a decade of underbuilding, which left real estate markets 5.2 million new homes short.”