New home sales increased in November for second straight month

Sales of new US homes unexpectedly rose in November as mortgage rates eased late in the month from their highs.

Purchases of new single-family homes increased 5.8% to an annualized 640,000 pace last month after rising in October. The median estimate in a Bloomberg survey of economists called for a 600,000 rate. The increase in home sales was primarily among states in the West and Midwest.

Data released by the Census Bureau and the Department of Housing and Urban Development showed the median sales price of a new home was $471,200, an increase of 9.5% from last year.

This comes after 30-year mortgage rates fell back below 7 percent. Despite the slight drop in mortgage rates, the Federal Reserve is expected to again raise interest rates even higher.

There were approximately 461,000 new homes for sale at the end of last month but the majority of these were under construction. The number of completed homes that were for sale in November increased to the highest level it’s been since June 2020.

As new construction declined, so did single family existing-home sales.

New-home purchases account for about 10% of the market and are calculated when contracts are signed.