Sales of newly built homes surged in November as prices fell to their lowest in more than two years, wooing cash-strapped buyers off the sidelines.
The median sales price of new houses sold last month was $402,600, an 8% decline from the prior month and the lowest level recorded since February 2022, the U.S. Census Bureau reported on Monday.
The number of signed contracts to buy new homes jumped 5.9% from October to a seasonally adjusted annual rate of 664,000. The November sales figure was up 8.7% from a year earlier.
Of the newly built homes sold in November, 25% sold for less than $300,000, up from a 13% share in October and 17% a year earlier. The median new-home sold price in November was lower than the $406,100 median sales price for existing homes, flipping the typical trend that sees new homes sell at a premium.
New-home prices are much more volatile than those of previously owned homes, and don’t usually follow the same seasonal patterns. Instead, they often reflect changes in the mix new construction for sale, as builders pivot to larger or smaller floorplans to meet the demands of the market.
That could mean that November’s price data is something of a fluke. Or, it could signal that builders are seriously amping up their efforts to offer smaller, more affordable homes in a housing market squeezed by high prices and stubbornly high mortgage rates.
Developing story, check back for updates.