Newly constructed, never-before-lived-in single-family home prices topped +$400,000 for the first time since March 2007, according to the US Census Bureau and the Department of Housing and Urban Development.
This is a substantial (and unexpected!) increase from the previous high of $329,400 for a brand new single-family home price. The +$400,000 figure represents an increase of +6.2%, a Seasonally Adjusted Annual Rate (SAAR) of $638,000. The number is +18.0% above the revised September 2017 estimate of $645,000 and +18.7% above the October 2016 estimate of $577,000.
At the end of October 2017, an estimated 282,000 newly constructed homes were for sale nationally. This 282,000 number represents a 4.9-month supply of newly constructed homes.
REALTOR.com chief economist, Danielle Hall said, “The pick-up of new home sales could open up builder confidence and lead to more new home construction…which would offer buyers additional options and create new opportunities for current homeowners looking to trade in their current home for a new one. (This could) potentially unleash existing home inventory and increased affordability down the line.”
This increase in new home sale prices corresponds well with the increase in sale prices of existing homes for sale. The average sales price of existing homes in October 2017 was up +3.3% y/y to $312,800. This price represents an increase of +8% nationally from October 2016 and is the highest increase since October 2007.
The North East led the way in new residential home sales with a hefty increase of +30.2% month over month. The Mid West also picked up new home sales with a +17.9% increase. The South was up 3.3%, the third consecutive month and the fastest in 10 years. The West had an increase of +6.4%.
Experts credit a steady job market and low interest rates for this propulsion of real estate demand and increased property prices.