The Census Bureau released its monthly report on U.S home sales on Monday. As per the data, sales of single-family homes in the United States unexpectedly dropped in December. The Bureau highlighted that the lower mortgage rates are serving to support the housing market at large, however, the shortage of homes in the “affordable” category contributed to the worse than expected report on Monday.
With a drop of 0.4% in December, the Commerce Department announced the U.S new home sales at 694,000 units (seasonally adjusted annual rate) in December. The Commerce Department further highlighted the sales to have hit a one-year low in the South. The decline was also reported to be the third time in a row for the U.S.
Maximum Sales Were Noted In The Price Range Of $200,000 To $749,000 In December
Sales in November were previously reported at 719,000 units. The revised data for November on Monday, however, downgraded the previous report to 697,000 units. As for price range, maximum sales in December were noted in the price range of $200,000 to $749,000. New homes under the price tag of $200,000 that is known to be the highest in demand, managed to account only for 10% of the sales in December.
According to Reuters, economists had expected the U.S new home sales to grow at a 1.5% rate in December to around 730,000 units. New home sales, as per the analysts, are known for higher volatility in terms of monthly records. As compared to the last year, sales in December were recorded around 23% higher. At 681,000 units in 2019, the annual growth in home sales was capped at around 10.3%. December’s figure was also branded the highest in over a decade.
Following 2018’s soft patch, the shortage of land and labor front continues to weigh on the U.S housing sector at large. The aforementioned sector currently makes up around 3.1% of the U.S gross domestic product (GDP). The shortage, as per the experts, is behind the higher house prices.
Median Prices Surged By 5% In December As Compared To Last Year
In December’s report, the median house price was reported at $331,400 that marked a 0.5% growth as compared to last year. Total sales in South were recorded at 347,000 units last month that saw a 15.4% decline. While South accounts for the greatest number of new home sales, the figure was announced as the worst since October 2018. On the other hand, Northeast also saw an 11.8% decrease in sales that was offset by a 10.1% increase in the Midwest and a massive 31.0% surge in the West.