What happened this month
New-home sales rose again in December to a seasonally adjusted annual rate of 698,000, a 3.6% increase from November 2024 and a 6.7% increase from December 2023. This aligns with improvements in existing-home sales and signals momentum for the housing market going into 2025. For 2024, an estimated 683,000 new homes were sold, a 2.5% increase over 2023. Though the median sales price of new homes sold in December ticked up to $427,000, throughout 2024, the median price was $420,100, well below 2023’s mark of $428,600. More affordable new inventory is driving sales, with 20% of December’s sales occurring on homes priced below $300,000, up from 15% last year. Despite mortgage rates remaining stubbornly high, new-home sales continued their strong performance.
Regionally, the Northeast and Midwest had the strongest showings in terms of new-home sales, up 25.9% and 40.3% year over year respectively. New-home sales in the South grew by 0.5% year over year, as the region maintained the lion’s share of new-home sales nationally, at 60.6%. The West rebounded from a relatively weak November by growing new-home sales 20.3% month over month and 6.9% year over year. All four regions of the country posted new-home sales figures in December that exceeded December of last year.
New-home share of inventory rising
The number of new homes for sale at the end of December reached 494,000 on a seasonally adjusted annual basis, growing for the fifth month in a row and reaching a 10% improvement from December 2023. New homes now make up 30% of homes on the market for sale, on pace with December of last year. The share of new homes on the market dipped in the middle of 2024 amid an influx of new existing home inventory, but has regained its level as new listings of existing homes cool in the winter months and new-construction completions remain strong. Months of inventory for newly built homes dropped a bit from 8.9 to 8.5 in December because of the growing pace of sales, but the new-home market remains a well-supplied, buyer-friendly one.
More completed new homes are on the market than nonstarted ones
The healthy supply growth and moderate pace of the new-home market means that more new homes for sale are ready for move-in. The share of newly built homes on the market that are completed remained at the 25% threshold that was typical of the pre-pandemic period, while the share under construction continued to fall to 53.8%. This is another positive development for buyers, who can take their time when choosing a new home and visit it in its finished state.
What does this mean for buyers and builders?
This month’s new-home sales data is another invitation to buyers to spend some of their home searching time in the new-construction segment. The market is better supplied than the existing-home market, offers plenty of affordable options, and sells a product that is ready for move-in instead of ready for renovation. In addition, we will show in our upcoming New Construction Insights Report (due for release on Jan. 28) that the new-home segment is much more likely to offer buyers relief from high mortgage rates in the form of buy-downs than the existing-home segment is. Not only can buyers get a brand-new product in this space, but they may even end up saving on their monthly payment when compared with purchasing an existing home.