According to a report released by the Commerce Department on Monday, new home sales in the United States experienced a significant and unexpected surge in December. The report revealed that new home sales rose by 3.6% to an annual rate of 698,000 units in December, following a massive jump of 9.6% to a revised rate of 674,000 units in November.
Economists had predicted a more modest increase of 0.9%, estimating new home sales would reach an annual rate of 670,000, based on the initially reported figure of 664,000 for the preceding month.
In 2024, an estimated 683,000 new homes were sold, marking a 2.5% increase from the 2023 total of 666,000 units, as noted by the Commerce Department.
A significant portion of the monthly growth in new home sales is attributed to a dramatic 41.7% rise in the Northeast. In the West, new home sales also saw a substantial increase of 20.3%. Conversely, sales in the South and Midwest experienced declines of 2.1% and 3.3%, respectively.
The report also highlighted a rise in the median sales price of new houses, which reached $427,000 in December. This figure represents a 6.1% increase from November's $402,500 and a 2.1% increase from $418,300 in the previous year.
At the end of December, there were 494,000 new houses available for sale, equating to an 8.5-month supply at the current sales pace. This inventory is slightly lower than the 8.7-month supply in November but higher than the 8.2-month supply in December 2023.
Additionally, a separate report by the National Association of Realtors (NAR) on Friday indicated that existing home sales in the U.S. also exceeded expectations in December. The NAR reported a 2.2% increase in existing home sales, reaching an annual rate of 4.24 million units in December, building on a 4.7% rise to a rate of 4.15 million units in November. Economists had forecasted a 1.0% increase to a rate of 4.19 million units.
This larger-than-expected rise in existing home sales brought the figures to their highest level since last reaching an annual rate of 4.38 million units in February.
