New home sales are hot, but what are the larger market trends?
Sales of new single-family houses rose 10.7 percent from September to October and 4.9 percent from Oct. 2014 to a seasonally adjusted annual rate of 495,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development.
Year to date, new home sales are now running 16 percent ahead of where they were in 2014, and October’s seasonal rate of 495,000 was new construction best sales rate since 2008.
Beyond those glowing statistics, though, are a number of trends that have defined new construction in the housing recovery, and we have three graphs below to demonstrate that.
First, here is a graph showing new home sales since 2000:
Clearly, new home sales are on the path to recovery, but at the same time, they remain far below their pre-bubble levels.
Next, here is a graph charting new home price over that same time period:
After falling between 2007 and 2011 – as the housing bubble slowly deflated – new home price resumed its rise, and since then, the average sales price for new homes has risen 36.62 percent.
And contributing to that steep rise in price has been the composition of new construction, which has changed considerably:
In just the last five years, entry-level new homes have fallen by nearly 60 percent, while luxury new homes (priced $500,000 and above) have risen by 124.4 percent, as new construction has trended more and more towards affluent consumers.