By Peter Ricci
New single-family home sales increased 17.2 percent year-over-year in October, according to the latest joint report from the U.S. Census Bureau and the Department of Housing and Urban Development.
Although sales were down 0.3 percent from September to October, as Bill McBride on Calculated Risk pointed out, new-single family home sales have averaged 361,000 over the first 10 months of 2012, up substantially from the 307,000 average of the same period in 2011.
New Single-Family Home Sales Gradually Improving
In addition to its new single-family home sales figures, the Census Bureau also reported on:
- The median sales price for newly-built single-family homes in October was $237,700, a 1.9 percent decline from September.
- The average sales price, by comparison, was $278,900, a 4.6 percent fall from September.
- We should mention that such price declines are expected during the wintry months; both median and average prices had increased by respective amounts of 14.6 and 12.2 percent from July to August, on the back of a strong summer home selling season.
New Housing Inventory Continues to Balance
The inventory of newly-built single-family homes was 147,000 at the end of October, which is a 4.8-months supply and a slight increase from September, when inventory was just 4.5-months.
Although this level of housing inventory is a bit below what is considered normal (a six-months supply is the general aim), it is still notably improved from what it was at the peak of the housing downturn. Indeed, in January 2009, new housing inventory peaked at an incredible 12.1-months supply, as the overbuilding of the housing boom years exceeded the market’s demand for new housing.
Now, however, with both investors and first-time homebuyers interested in new single-family homes, inventory has made some dramatic strides, and is one of the clearest signs going forward that housing has bottomed and will gradually recover. And plus, with housing starts and builder confidence at extremely promising levels, we can expect good things going forward in the new single-family home sales market, particularly when the market heats up in the spring.