Despite a shortage of previously owned homes on the market, new home sales in November surged to a seven-month high, helping alleviate an acute housing shortage. Nonetheless, rising house prices are now a hindrance for first-time home purchasers.
The Commerce Department reported Thursday that new home sales rose 12.4% last month to 744,000 units, the highest level since April. The previously reported 745,000 units sold in October were revised down to 662,000 units.
The South, the West, and the Northeast saw sales rise, while the Midwest saw declines, Kitco reports.
A Reuters poll of economists predicted that new home sales, which constitute more than 10% of U.S. home sales, would rise to 770,000 units.
November sales were down 14.0% from the previous year. In January, the number of units built peaked at 993,000, the highest since the end of 2006.
According to the National Association of Realtors, inventory levels of previously owned homes in November were at an eight-month low.
Over the past year, new house prices have risen 18.8% to $416,900 at the median. The number of new homes on the market rose to 402,000 from 392,000 in October.
The inventory consisted of 62.9% completed homes, while 27.4% were still under construction.
According to government data published last week, there is an unprecedented backlog of homes that have been approved for construction but not yet started. Workers are in short supply, materials are expensive, and supplies are delayed.
If sales continue at November’s pace, number of homes on the market will be cleared in 6.5 months, down from 7.1 months in October.