More new single-family homes were sold in December 2024 on both a monthly and annual basis, with sales for all of 2024 up from the previous year, according to data from the U.S. Census Bureau.
This is 3.6 percent higher than in the previous month and up by 6.7 percent from December 2023. On a monthly basis, home sales were up in the Northeast and the West, but down in the Midwest and South. All four regions posted gains annually.
Overall, an estimated 683,000 new homes were sold last year, a 2 1/2 percent increase from 2023.
“First, in many markets, there was simply more new home inventory and some buyers who might have wanted to purchase an existing home were instead looking at new construction,“ she said. ”Second, home builders were able to offer prospective buyers concessions, including rate buydowns, to entice them to new home communities.”
Sturtevant said the balance between new and existing home markets could change this year.
“The available supply of existing homes for sale is increasing as more current homeowners are deciding to sell,“ she said. ”And while mortgage rates remain elevated and builders will still promote rate buydowns, those concessions get more difficult as profit margins narrow.”
According to NAHB Chief Economist Robert Dietz, the association is forecasting a “slight gain” for new home sales this year, citing “ongoing solid macroeconomic conditions,” especially the labor market.
Sales Pace and Mortgage Rates
Although new home sales rose last year, the overall pace of home sales has now slowed down, according to a Jan. 30 report by real estate brokerage Redfin.The typical home now takes two months to sell—the slowest pace in five years, according to the report. Homes are also sitting on the market longer. For the four weeks ending on Jan. 26, there were 5.2 months of supply on the market, the highest since February 2019.
The company blamed the slow pace on high prices and mortgage rates, saying that home prices are 4.8 percent higher on an annual basis while rates are hovering close to 7 percent. The median monthly housing payment is $2,753—the highest level since April 2024.
“Prospective buyers have been cautious because they’ve seen homes sitting on the market and they’ve heard interest rates and prices may drop. When the market isn’t competitive, some buyers think they should wait for costs to go down,” Jordan Hammond, a Redfin Premier agent in Raleigh, N.C., said.
“Now it’s pretty clear that sellers aren’t slashing asking prices and mortgage rates aren’t plummeting, so mindsets are shifting. People are starting to believe that if they want or need to move, and they can afford to, they should do it.”
Rates had hit a bottom of 6.08 percent in late September 2024 but have ballooned by almost a percentage point since then.
“Driven by these higher rates and a persistent supply shortage, affordability hurdles still exist for many homebuyers and a significant number of them remain on the sidelines,” Khater said.
