With the demand for houses maintaining a ferocity and the supply for existing home maintaining a low level, US home buyers have decided to go to route of purchasing new construction. Sales of new homes were purchased at a pace not seen in 25 years and sales of new construction homes increased 17.5% in November from a month earlier.
According to the report released by the Commerce Department, new home sales last month increased to a seasonally adjusted annual rate of 733,000 units compared to 624,000 in October. It is the biggest monthly gain since January 1992.
New construction homes have increased steadily and the inventory of existing homes continue to fall. Some of the demand is also precipitated by an increasing economy and 17 year low in unemployment. Sales of existing homes has also increased at sizzling pace which will see an estimated 5.81 million sold within the year and a 3.8% increase year over year. This has amounted to a significant shortage while demand is strong in all regions.
In the Northeast, sales of new construction homes increased by 9.5%. The Western region lead the overall charge with an increase of 31%. This was followed by the South with an increase of 14.9%, then the Northeast and the Midwest having the 6.9% increase. Median sales prices increased by 1.2% to $318,700 and the average sales price is $377,100.
The numbers falls in line with Homebuilder confidence levels which we reported on and can be read here. According to the survey, homebuilder confidence hit a high of 74 on their index. The number reached according to the survey is the highest since 1999.
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