New home sales leapt a better-than-anticipated 11.6% in December above November’s pace, closing out a good year for the housing market on a positive note, according to a joint report from the U.S. Department of Commerce and the U.S. Department of Housing and Urban Development revealed January 27.
The data indicates that sales were much stronger than they were the previous year. In 2013, existing home sales in December rose slightly after three consecutive falls to a total of 5.09 million sold. About 429,000 new homes specifically were sold that year, 1.2% lower than 2014’s level of 435,000. What’s more, new single-family homes reached an annual, seasonally adjusted rate of 481,000 in 2014, 8.8% higher than 2013’s estimate of 442,000.
The median price of a new home sold in December was $298,100, an improvement over November’s $291,600. The average sales price was $377,800, again, an improvement over November’s $344,600.
These price hikes, though, may not be such a good thing.
“We’re seeing that the hottest demand is at the most affordable price points,” Hela Richardson, chief economist at the real estate brokerage Redfin, told the Associated Press. “That means if prices go up too far too fast, buyers will step back and wait for them to drop again.”
An earlier report from the National Association of Realtors indicates that 2013 had a faster sales rate. According to the data, previously owned home sales increased by 2.4% in December, indicating that 2014 finished 3.1% slower than 2013 did.
The report also included revisions of previous months’ numbers, indicating that 2014’s sales pace began slowing around September. According to the revisions, there were 448,000 new homes sales in August, 455,000 in September, 445,000 in October, 438,000 in November, and 481,000 in December, as previously mentioned.
Luckily, new housing construction in 2014 still finished at the strongest level since 2007, rising 4.4% in December. And while builder confidence in the market for new, single-family homes in January fell a single point to just 57, a level higher than 50 means that more builders feel conditions are good, rather than poor.