December 2010 was a good month at the end of a very bad year—the worst year on record, in fact—for new-home sales, according to data released today by the U.S. Census Bureau and HUD. While sales of new homes jumped 17.5%, to a seasonally adjusted annual rate of 329,000, from the month before, that number is still 7.6% below the December 2009 estimate of 356,000.
The month's largest increase came from the West, with a 71.9% increase from the previous month and up 32.5% from December 2009. The Midwest and South showed modest increases from November, up 3.2% and 1.8% respectively; but both were down year-over-year, the Midwest 37.3% lower and the South down 8.7%. The Northeast was down 5.0% from November and down 50.0% from December 2009.
In a press release this afternoon, Patrick Newport, U.S. economist at IHS Global Insight, attributed the West's high numbers to building code changes in California, but added that "one cannot rule out the possibility that fundamentals, such as job growth, may also be playing a role, given that existing-homes sales have rebounded much more strongly in the West than in the other three regions."
The year overall was a discouraging one. Sales of new homes fell to a record low of 321,000 in 2010, 14.2% below 2009's 375,000, the second worst year on record.
All that being said, the numbers did expose some silver lining:
Inventory of new homes for sale fell to their lowest level in more than four decades to 190,000 by the end of 2010, down 17.7% from 231,000 at the end of 2009. And months' supply dropped to 6.9 months from 7.8 the year before. The amount of time it took to sell a new home was cut almost in half, reaching 7.9 instead of the 14 months it took at the end of 2009.
Not surprisingly, the majority of homes sold during 2010 were on the lower end of the price scale, with 72.6% of homes sold priced less than $300,000.
Claire Easley is senior editor, online, for Builder.
Learn more about markets featured in this article: Greenville, SC.