US new home sales decline in December; stock drops

Sales of new U.S. single-family homes fell in December, but builders made progress in reducing inventory build-up, potentially allowing them to break ground on more new housing projects. New home sales fell 1.7% to a seasonally adjusted annual rate of 745,000 units, the Commerce Department’s Census Bureau said Friday. Sales rose from 656,000 in October to 758,000 units in November. The data has been delayed by the government shutdown last year.

New home sales represent a small portion of U.S. home sales and tend to be volatile from month to month. They are counted when signing a contract. Sales of new homes rose 3.8% year-on-year in December.

The stock of new homes fell from 485,000 in November to 472,000 homes in December. The stock of homes under construction was the lowest in almost 4.5 years. At December’s sales pace, it would take 7.6 months for the supply of new homes to hit the market, compared to 7.7 months in November.

The average price for new homes rose 4.2% to $414,400 in December, compared to a year earlier.

The housing market could get a boost from mortgage interest rates. The average interest rate on the popular 30-year fixed-rate mortgage fell to 6.01% this week from 6.09% last week, the lowest level since September 2022, according to data from mortgage financing company Freddie Mac.