US new home sales unexpectedly increase in November for second straight month
Sales of new US homes surprised in November with 5.8% increase
Housing will continue to decelerate in 'pandemic boomtowns': Jenna Stauffer
Global real estate adviser Jenna Stauffer reacts to Fed Chair Jerome Powell saying the U.S. is in a 'housing bubble' on 'Cavuto: Coast to Coast.'
Sales of new U.S. homes rose for a second straight month in November as buyers took advantage of mortgage rates that eased slightly from a previous high.
New single-family home purchases rose 5.8% to a seasonally adjusted annual rate of 640,000 units, the Commerce Department reported Friday. Economists surveyed by Refinitiv expected new home sales – which account for a small percentage of total sales – to fall 4.7% last month.
On an annual basis, new home sales are still down 15.3%.
The median new house price climbed nearly 9.5% in November from the year-ago period to $471,100. However, that is down about 4.5% from October. There were about 461,000 new homes on the market at the end of November, the report shows, a slight decrease from the previous month.
FED SLOWS INTEREST RATE INCREASES WITH 50-BASIS-POINT HIKE, BUT SIGNALS MORE TO COME
A for sale sign stands in front of a house on Oct. 6, 2020, in Westwood, Massachusetts. (AP Photo/Steven Senne, File / AP Newsroom)
The interest rate-sensitive housing market has borne the brunt of the Federal Reserve's aggressive campaign to tighten monetary policy and slow the economy.
Policymakers already lifted the benchmark federal funds rate seven consecutive times – including four 75-basis-point increases in June, July, September and November – and have indicated they plan to continue raising rates higher in 2023 as they try to crush inflation that is still abnormally high.
US NATIONAL DEBT ON PACE TO BE 225% OF GDP BY 2050, PENN WHARTON SAYS
The average rate for a 30-year fixed mortgage fell to 6.27% this week, according to recent data from mortgage lender Freddie Mac. While that is significantly higher than just one year ago when rates stood at 3.05%, it is down from a peak of 7.08% notched in November.
In this aerial view, completed and under construction new homes at a site in Trappe, Maryland, on Oct. 28, 2022. (Photo by JIM WATSON/AFP via Getty Images / Getty Images)
Combined with high home prices, the rapid rise in borrowing costs has pushed many entry-level homebuyers out of the market
A separate report released last week showed that existing home sales slowed for the tenth consecutive month.
Sales of previously owned homes tumbled 7.7% in November from the prior month to an annual rate of 4.09 million units, according to new data released Wednesday by the National Association of Realtors (NAR). That is worse than what economists were expecting, according to Refinitiv, and it marks a sharper monthly decline than usual.
CLICK HERE TO READ MORE ON FOX BUSINESS
On an annual basis, home sales plunged 35.4% in November.
"In essence, the residential real estate market was frozen in November, resembling the sales activity seen during the COVID-19 economic lockdowns in 2020," said Lawrence Yun, the chief economist at NAR. "The principal factor was the rapid increase in mortgage rates, which hurt housing affordability and reduced incentives for homeowners to list their homes."