So much for the holiday spirit. Sales of new homes plummeted 11.3% in November compared to the previous month, according to data released Wednesday by the U.S. Census Bureau.
That translates into a seasonally adjusted sales pace of 355,000 new homes, which stands 9% below the same month one year ago.
In comparison, sales of existing homes hit a three-year high in November, according to data released Tuesday by the National Association of Realtors (NAR). Pricing could certainly be a factor. While the median sales price for new homes stood at $217,400 in November, the price of an existing home was just $172,400—a difference of $45,000 at a time when the unemployment rate is in the double digits.
The uncertainty regarding the federal housing tax credit certainly could also have been a factor in the new-home sales dive. While Congress did extend and expand the credit in early November, that likely came too late to deliver much of a boost to builders, who had an inventory of just 239,000 homes for sale in October and not enough time to deliver a new home by the previous Nov. 30 tax credit deadline.
The new home inventory remained similarly low in November, with just 235,000 houses available. That represents a supply of 7.9 months at the current (low) sales pace. In this environment, new-homes are taking more than a year to sell; the median number of months for sale rose to 13.6 in November.
Alison Rice is senior editor, online, at BUILDER magazine.