Sales of newly-built, single-family homes declined 0.4% to a seasonally adjusted annual rate of 694,000 units in December, coming off a downward revision in November, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The monthly number is 23% higher than the December 2018 pace. An estimated 681,000 new homes were sold in 2019, 10.3% higher than in 2018, reports the National Association of Home Builders (NAHB).

“High levels of home builder confidence, coupled with an insufficient existing housing supply to meet current demand, suggest growth ahead for new home sales this year,” said NAHB chairperson Dean Mon, a home builder and developer from Shrewsbury, N.J.

A new home sale occurs when a sales contract is signed or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the December reading of 694,000 units is the number of homes that would sell if this pace continued for the next 12 months.

“Despite the slow start for housing in 2019, lower mortgage interest rates accelerated new home sales during the second half of the year, marking it as the best year for new home sales since the recession,” said NAHB chief economist Robert Dietz.

Inventory has been trending lower over the course of 2019 and now stands at a healthy 5.7 months’ supply, with 327,000 new single-family homes for sale, reported NAHB. Of that total, just 78,000 are completed, ready to occupy. The median sales price was $331,400. The median price of a new home sale a year earlier was $329,700.

According to NAHB, regionally and on a year-to-date basis, new home sales are higher in the Midwest (10.1%) and West (31%) but are down in the Northeast (11.8%) and South (15.4%).

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