US Home Sales Surge as Supply Rises

A for-sale sign outside a home in Irvine, Calif., on Sept. 21, 2020. John Fredricks/The Epoch Times

New home sales in the United States increased in November on a monthly basis, amid a decline in prices and a rise in inventories, according to the latest data from the U.S. Census Bureau.

“Sales of new single-family houses in November 2024 were at a seasonally adjusted annual rate of 664,000,” the agency said in a Dec. 23 statement. This is up by 5.9 percent from October and 8.7 percent above the November 2023 estimate. Sales grew month over month in the Midwest and South and declined in the West and Northeast.

The jump in nationwide sales came as the average price of a new home declined by more than 7 percent to $484,800, and market inventory rose by 2.1 percent.

There were 490,000 new units for sale by the end of November, which represented a supply of 8.9 months at the current pace of sales.

New homes that were move-in ready accounted for 25.3 percent of all homes for sale in November, the highest level since 2016, according to a Dec. 23 post from the real estate listings website Realtor.

“A result of this healthy supply growth is that more move-in ready new homes are on the market for buyers to actually take a look at,” Realtor senior economist Joel Berner said. “This is a positive development for buyers, who can take their time, see a finished home, and make an informed decision more than they have been able to for years.”

A misconception that newly constructed homes are beyond the budgets of prospective buyers has been laid to rest, Berner said.

These properties are “often offering better prices, better financing, and a better product than the existing-home segment is now,” he said.

Overall home sales rose by 4.8 percent on an annual basis nationwide last month, according to a recent report from real estate brokerage Redfin. Sales jumped by double digits in the “pricey” housing markets on the West Coast, Redfin said.

Among the 50 most populous U.S. metropolitan areas tracked by the company, Portland, Oregon, saw the largest jump, with yearly sales rising by 27.6 percent.

This was followed by San Jose, Seattle, San Francisco, Sacramento, and San Diego, it said. Except for Seattle, the remaining metros are all in California.

Redfin attributes the rising activity in West Coast markets to a shortage of homes for sale.

“There’s low inventory, so if a house checks all the boxes, it’s selling very quickly with multiple offers,” Redfin’s Bay Area real estate agent Josh Felder said.

“Even homes in the $1 million to $3 million range are getting five to seven offers if they are move-in ready and in the right neighborhood with the right schools—and they can sell for anywhere between 10% and 14% over the asking price.”

While new home sales are rising, builders expressed concerns about “high interest rates, elevated construction costs and a lack of buildable lots,” according to a Dec. 17 statement from the National Association of Home Builders (NAHB).

The U.S. Federal Reserve recently suggested scaling down the pace of its interest rate cuts next year, citing strong inflation. As a result, mortgage rates may not fall to expected levels, posing a challenge for builders.

NAHB Chief Economist Robert Dietz predicts mortgage rates to remain above the 6 percent level next year, citing “concerns over inflation risks.”

The average weekly rate on a 30-year fixed-rate mortgage has remained higher than six percent for more than two years, according to data from Freddie Mac.

While elevated rates discourage many would-be buyers from entering the market, Freddie Mac Chief Economist Sam Khater said that prospective homebuyers are “slowly digesting these higher rates and are gradually willing to move forward with buying a home.”

Fannie Mae expects the “lock-in effect” as well as affordability concerns to keep housing activity subdued next year. The “lock-in effect” refers to the phenomenon in which people who already bought their homes at lower mortgage rates refuse to sell the property in the current high-rate environment.

“On average, we expect mortgage rates to remain elevated and a hindrance to activity,” Fannie Mae Senior Vice President Mark Palim said.