A limited supply of existing homes, coupled with strong demand, contributed to an increase in new home sales at the end of 2024. This comes despite ongoing challenges related to housing affordability.
Data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau show that sales of newly built single-family homes rose by 3.6% in December, reaching a seasonally adjusted annual rate of 698,000. This figure represents a 6.7% increase compared to December of the previous year.
"New home sales ended 2024 higher on ongoing limited resale inventory conditions," stated Carl Harris, chairman of the National Association of Home Builders (NAHB) and a custom home builder from Wichita, Kansas. He added that builders are "cautiously optimistic about the building market for 2025 given a post-election policy reset that seeks to eliminate unnecessary regulations."
Robert Dietz, NAHB Chief Economist, noted that "new home sales ended the year 2.5% higher over the 2023 total." He further commented that "NAHB is forecasting a slight gain for sales in 2025 given ongoing solid macroeconomic conditions, particularly for the labor market."
A new home sale is recorded when a contract is signed or a deposit is accepted, regardless of whether construction has started or been completed. The December reading suggests that if this pace continues for the next year, approximately 698,000 units would be sold.
The inventory of new single-family homes increased by 10% in December compared to a year earlier, reaching 494,000 units. This equates to an 8.5-month supply at the current pace of building. Additionally, completed ready-to-occupy inventory rose by 46%, totaling 118,000 units compared to last year.
According to NAHB estimates, the combined supply of new and existing homes fell to just four months in December—the lowest since April 2024—indicating an imbalance as six months' supply is considered balanced.
The median price for new homes sold in December was $427,000—a rise of 2.1% from last year.
Regionally for all of 2024, new home sales saw significant growth in the Midwest with a rise of 19%. Sales also increased by 1.7% in the Northeast and by 2.6% in the West but saw a slight decline of 0.2% in the South.
