Key Highlights
- New home sales hit a two-year high in Q4 2019, according to Redfin
- Prices for new homes were flat or just slightly down in some parts of the country compared to Q3
- Building permits for single-family homes hit the largest quarterly increase since 2015
New homes sales increased +8.8% y/y in Q4 2019, according to Redfin, and that volume of new home sales hit a two-year high.
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The median price for a newly constructed single-family home in Q4 2019 was $369,900, just -0.3% lower than in Q3. Redfin indicated that the pace of new home price declines during Q4 was the smallest decline in the past three quarters. Redfin speculated that prices of newly constructed homes may have hit the bottom.
Like existing home supplies, new home supplies dropped an eye-opening -11.1% y/y, the largest supply decline since at least 2012. One of the results of declining new home supplies is fewer days on the market and this data point rang true in Q4. DOM came in at 90, down from 94 DOM in Q4 2018.
One optimistic sign for the housing market in general was that building permits for all types of residential construction jumped up +12.2% y/y in Q4 2019, the largest quarterly increase since 2005.
Building permits for single-family homes rose +9.8% nationwide. Little Rock AK led the country in terms of building permits with an extraordinary increase of +208.9%. San Francisco, on the other hand, experienced the biggest decrease of building permits, -67.4%, in the country during Q4 2019.
According to Daryl Fairweather, Redfin’s chief economist, “The market has seen a switch between where new construction of homes is needed and where new homes are being built, and that’s because home builders are focused on areas where they can cheaply acquire and develop land. The only way to solve this mismatch between where people need homes and where homes are being built is for people to move to where the homes are, and that’s already happening.”
Thanks to MansionGlobal’s Fang Block for source data.
Also read: Mortgage Lending’s Biggest Quarter in 14 Years!, Millennials Kick up Homeownership Rates But Remain Overwhelmed by Buying Process, New Home Sales to Rise to 13-Year High in 2020
