New home sales in the United States hit a 10-year high in November 2017.
New-build single-family sales were up 17.5% to a seasonally-adjusted 733,000, from a downwardly revised October reading. That is according to new data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. This is the highest sales pace since July 2007.
New home sales are up 9.1% in the last 12 months.
Granger MacDonald, chairman of the National Association of Home Builders (NAHB), says, “The November sales numbers are consistent with our reports of growing builder confidence, particularly big gains in traffic to new home sites.
“Builders are encouraged by the increased demand for housing and expect business to continue to improve in 2018.”
Continued strengthening of the housing market
NAHB Chief Economist Robert Dietz, adds, “Tax reform legislation should boost economic growth, setting the stage for continued strengthening of the housing market.
“Job market growth, expected wage increases and tight existing home inventory will also help the market move forward next year.”
The inventory of new homes for sale was 283,000 in November. That is a 4.6-month supply at the current sales pace.
In addition, builder confidence in the market for newly-built single-family homes increased five points in December to 74. This is the highest level since July 1999, over 18 years ago.
“The HMI measure of home buyer traffic rose eight points, showing that demand for housing is on the rise,” says Robert Dietz. “With low unemployment rates, favorable demographics and a tight supply of existing home inventory, we can expect continued upward movement of the single-family construction sector next year.”
Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.
All three HMI components registered gains in December. The component measuring buyer traffic jumped eight points to 58. The index gauging current sales conditions rose four points to 81. Finally, the index charting sales expectations in the next six months increased three points to 79.