January 25, 2024 15:21 GMT
New Home Sales Beat Expectations, Supply Gap Vs Existing Remains Wide
US DATA
New home sales beat expectations in December at 664k (seasonally adjusted and annualized) vs a median estimate 649k. This was 49k up from November and came with upward revisions to the prior 3 months of a total 27k.
- November's surprisingly big slump was largely revised away (had been 590k, now 615k).
- Looking at the bigger picture, while new home sales are a volatile series, they have stabilized in roughly a 600-700k range since mid-2021, with the total 2023 figure of 668k up 4.2% Y/Y from 2022.
- Total supply fell to 8.2 months versus 8.8 in November, with houses for sale of 453k in December (+0.9% M/M to a 12-month-high - though NSA). This compares to an existing homes supply ratio of 3.2 months in December.
- Median prices fell by a substantial 13.8% Y/Y to $413,200, the lowest since December 2021 (NSA), while average prices fell 14.3% to $487,300.
- Overall the divergence continues between relatively looser supply dynamics in the new home market vs existing homes - exacerbated largely by low fixed rate mortgages for existing homeowners.
Source: Census Bureau, MNI
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