Sales of newly built, single-family homes increased 5.5 percent to a seasonally adjusted annual rate of 290,000 units in November, according to newly released figures from the U.S. Commerce Department. The gain represents a partial bounce-back from a near-record low, downwardly revised number of new-home sales in October.
“While builders continue to face a great deal of competition from short-sale and foreclosure properties, the improvement registered in new-home sales in November is a good sign,” said Bob Jones, chairman of the National Association of Home Builders (NAHB) and a home builder from Bloomfield Hills, Mich. “With consumer interest in new homes expected to continue to revive as the economy and job markets improve, and inventories of new homes for sale near record lows, our concern now is that a lack of construction financing will keep builders from being able to expand the selection of what they have to offer buyers heading into the spring.”
“Builders in our latest surveys have indicated that they are starting to see more buyers who are seriously considering a new-home purchase, and today’s numbers showing that sales headed in the right direction in November bode well for what the future may hold,” agreed NAHB Chief Economist David Crowe. “The extremely low inventory of new homes on the market is also a positive sign that builders have been exercising tremendous caution with regard to new construction activity. That said, unless builders’ access to financing for new development improves, many will not have a product to sell when the opportunity arises, which in turn would slow a market recovery as well as potential job generation from new home building.”
The improvement in new-home sales was driven by gains in two regions in November. The South, which is the nation’s largest housing market, posted a 5.8 percent gain, while the West showed a 37.3 percent rebound from the previous month. Meanwhile, declines of 26.7 percent and 13.2 percent were registered in the Northeast and Midwest, respectively.
The inventory of new homes for sale fell to 197,000 units in November, marking the first time in 42 years that this measure has fallen below the 200,000 level. This amounts to an 8.2-month supply at the current sales pace.