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First Cut: Sales of new single-family homes brisk in November were brisk in the Northeast and West

Sales of new single-family homes were up 1.3% in November from October, an increase that was carried by a surge in sales in the Northeast (up 52.4%) and strong sales in the West (up 7.5%). Sales were flat in the Midwest and down in the South (down 4.1%). Uneven conditions may have been in part due to weather. However, the underlying pace of sales is overall strong and can be attributed to low mortgage interest rates. Compared to November 2018 when mortgage rates hit a near-term peak, sales in November 2019 were 16.9% higher. If the level was a bit of a disappointment relative to market expectations, sales in November remained among the best in 2019 to-date.

The supply of homes on the market were not much changed in the past four months. November’s supply rested at 5.4 months’ worth. Prices of new homes were up 4.4% to $330,800 in November from $316,900 in October and up 7.2% compared to the $308,500 in the year-ago month.

Some of the increase in prices was related to the market segment in which sales took place. In November, 30% of sales were in the $200,000-$299,999 price range, down from the 36% in the prior month. The share of sale in the $300,000-$399,999 range was 25%, not much changed from the 24% in the prior month. However, 15% of sales were in the $400,00-$499,999 range as compared to 11% in October. Sales of new homes at $500,000 and up were also little changed from the prior month at up a tenth from the previous share.

Sales for units not started in November were up 6.6% to 209,000 and under construction were up 3.3% to 254,000. Completed unit sales were down 4.5% to 256,000 from the prior month. Consumers have been eager to sign contracts for new construction while prices and mortgage rates have been favorable. That has left fewer completed units on the market available for sale.

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