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New Home Sales: Another Sharp Downward Revision

December 23, 2021
Bottom Line:  New home sales rose in November, but for the second month in a row there was a sharp negative revision to the prior month's data. Looking through the recent volatility and survey difficulties, the trend rate of new home sales has plateaued but remains historically elevated, if moderately below 2020 levels. Overall, the housing market remains tight, with existing home supply very tight and continued demand for single-family homes, even amid moderately higher mortgage rates.
New Home Sales ROSE by 12.4% to 744k, after the prior month was revised lower to 662k. This compared with market expectations for an increase to 770k, from the unrevised October level of 745k.
Sales are now 14.0% BELOW their year-ago level.

The Inventory of Homes Available for Sale
ROSE by 2.6% to 402k. Inventories are now 38.6% ABOVE their year-ago.
Combined with the increase in sales, the Months' Supply dropped to 6.5 months from 7.1 months. This is modestly ABOVE a normal level of 6.0 months.
Home Prices ROSE with median prices 18.8% ABOVE their year-ago level and with average prices 21.6% ABOVE their year-ago level.