New home sales rose to a seasonally adjusted annual rate of 592,000 in November. Census Bureau numbers showed the average price of a new home contracted in November was $359,900, down from the average price of $376,800 seen last year. The median price of $305,400 was also lower than last year’s median of $317,000. New home sales have been surprisingly strong for most of the year, posting double-digit increases compared to last year.

New Home Sales YoY

Census revised previous months sales slightly lower, but all things considered new home sales have been fairly strong prior to the interest rate scare.

November made for a pretty easy year-over-year comparison on existing home sales, and the new home sales numbers from Census are likely to cool in the months ahead. It will be interesting to see how buyers react to 4 percent-plus mortgage rates. Builders will have to work on bringing more affordable homes to market if they want to sustain any sales growth. The average price decline in the latest Census numbers bear this out. For now, higher mortgage rates have made new homes more expensive even if builders try to hold prices static. That diminished affordability is going to pose a problem in the months ahead.

It is important to note that the Census new home sales numbers are estimating signed contracts, where NAR’s existing home sales numbers are reporting actual closings.