Decent 2017 For New Home Sales


First, repeat after me, : “I will not read into big month to month moves in the new home sales and housing start numbers, be they up or down, ever.”

In 2017 we saw big moves the in new home sales numbers, month to month, which caused confusion among the uninitiated. The trend however, showed a slow and steady increase in new home sales.

New home sales look fine! 

This housing cycle was the weakest unit sales growth for new home sales ever in U.S. history. This makes sense with our demographics, affordability issues and not having anymore exotic loans. Anyone who is pushing a thesis that housing starts should now be between 2-3 million is a propaganda talking head. I will keep saying that we won’t see more aggressive housing starts data until new home sales reach higher nominal levels.

From Census:

New Home Sales:

Sales of new single-family houses in December 2017 were at a seasonally adjusted annual rate of 625,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 9.3 percent (±11.0 percent)* below the revised November rate of 689,000, but is 14.1 percent (±13.0 percent) above the December 2016 estimate of 548,000.
An estimated 608,000 new homes were sold in 2017. This is 8.3 percent (±4.1 percent) above the 2016 figure of 561,000.

Sales Price:

The median sales price of new houses sold in December 2017 was $335,400. The average sales price was 

For Sale Inventory and Months’ Supply:

The seasonally-adjusted estimate of new houses for sale at the end of December was 295,000. This 
represents a supply of 5.7 months at the current sales rate.

Remember that the monthly supply of new homes has been higher, month over month for ever single month in this cycle than the previous cycle when we had a lot more sales.

From Fred:
JAN 2018 New Home Supply

Remember too that new home sales have legs because they’re still very low in historical context.  This is especially true since we have over 154,000,000 people working and mortgage rates have never been this low.

From Doug Short:


For 2017 I was looking for this for new home sales

” For 2017, I predict 4%-7% growth, if the positive trend of builders offering smaller homes continue then we can have much more growth in sales in 2017

We ended the year with 8.3% growth. The cooling off in the rate of growth of the average sales price is helping new home sales. This doesn’t mean that prices are declining but the rate of growth is slower

October of 2014  the average sales price was $377,500.  In December of 2017 it was $398,000.

From Fred:

Average sales price Jan 2018 New Homes

The rate of growth slowed once smaller homes were included into the mix. I can’t express how important this chart below is to the future of housing in America.


With 8.3% sales growth , 2017 new home sales look exactly as I expected they would—with the growth in sales cooling but still growing. I wouldn’t read too much into sales growth trending at a 3 year low in 2017.

” For 2017, I predict 4%-7% growth, if the positive trend of builders offering smaller homes continue then we can have much more growth in sales in 2017

My 2018 Housing Predictions can be found here:

For 2018, going into the spring season, we have a cycle elevated level on mortgage rates so far. Typically rates would fall during this period, but for now rates haven’t moved downward.  We will see if this impacts any marginal buyers from buying a bigger more expensive new home compared to a cheaper existing home.

Slow and steady is the name of the game for new home sales and don’t let anyone trick you into thinking we have record-breaking demand.

Logan Mohtashami is a financial writer and blogger covering the U.S. economy with a specialization in the housing marketLogan Mohtashami is a senior loan officer at AMC Lending Group,  which has been providing mortgage services for California residents since 1987. Logan also tracks all economic data  daily on his own facebook page