New Home Sales: Slower to End 2020

Bottom Line:   After a spike in activity, new home sales slowed but remained in an uptrend as 2020 closed.  Unlike existing home sales, which can sustain longer surges in activity, new home sales take longer as permitting and construction need to adjust to demand. After solid gains from August through October, sales slowed in November and December, coming in below expectations with slightly negative revisions.  Overall, though, the trend remains firmly higher.  Sales are still stronger than at any time from 2007 until early 2020.New Home Sales FELL by 11.0% to 841k, after the prior month was revised lower to 965k.  Sales are now 20.8% ABOVE their year-ago level.

The Inventory of Homes Available for Sale ROSE by 1.8% to 286k. Inventories are now 11.2% BELOW their year-ago level.Combined with the decline in sales, the Months' Supply increased to 4.1 months from 3.6 months. This is modestly BELOW a normal level of 6.0 months.

Home Prices ROSE with median prices 2.2% ABOVE their year-ago level and with average prices 1.5% ABOVE their year-ago level.