New Home Sales dropped 10.5% year-over-year to an annualized rate of 607K. Last summer there were 664K new homes under contract. Six months ago there were 641K, and three months ago there were 638K. So we’re seeing a methodical, steady decline in the new construction arena.
The median sales price of new homes has decreased 1% year-over-year and 2.3% month-over-month to $393K. On average, newly constructed homes are smaller and closer together than they ever have been. Ten years ago the average new home was 2,724 square feet and build on an 8,500 square foot lot. That has shrunk to 2,400 sq’ and <7,000 sq’ respectively.
Meanwhile, reports by the FHFA and Case Shiller out this morning corroborate a 0.4% price increase m-o-m, 2.7% increase over the last four months, and 1.5% appreciation rate y-o-y. These are all nationwide averages. Overpriced homes will continue to sit unsold until either the market catches up or the sales price gets adjusted.
