An ongoing shortage of land, labor and materials pushed new-home sales lower than experts expected – but they were still 20.8% higher year-to-year.
WASHINGTON – While buyer demand remains strong, builder challenges – a lack of available land, a shortage of skilled laborers and a rising cost for raw materials – pushed the number of new-home sales in November lower than experts predicted.
On a month-to-month comparison, November new home sales were down 11.0% (seasonally adjusted) compared to a revised figure for October, according to data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. Economists polled by Reuters expected a decline closer to 0.3%.
However, the new-home industry has been expanding all year, and November’s sales were up 20.8% compared to sales one year earlier (November 2019).
“Though the market remains strong, the pace of sales pulled back in November as inventory remains low and affordability concerns persist as builders grapple with a shortage of lots, labor and building materials,” says Chuck Fowke, chairman of the National Association of Home Builders (NAHB) and a custom home builder from Tampa.
A home is recorded as a new-home sale when a sales contract is signed or a deposit accepted. At that point, the home could be in any stage of construction – not yet started, under construction or completed. The numbers are seasonally adjusted, meaning the November reading of 841,000 units is the number of homes that would sell if the pace continued for the next 12 months.
In November, the median cost of a newly built home was $335,300, or 2% more than it was one year earlier. Builders had a 4.1-month supply of homes, an increase from 3.6 months in October.
Regionally, on a year-to-date basis, new home sales were up in all four regions: 28.2% in the Northeast, 24% in the Midwest, 16.9% in the South, and 20.5% in the West.
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