While new home sales received a slight bounce in November from moderating mortgage rates, the housing market continues to struggle because of ongoing supply chain disruptions, elevated construction costs and challenging affordability conditions.
Here in the south, new home sales have fallen 13.1% on a year-to-date basis.
Sales of newly built single-family homes in November did see an increase of 5.8%, the latest data from the U.S. Census Bureau and HUD shows, but new-home sales are down 15.2% on a year-to-date basis.
“Declining mortgage rates during the second half of November, combined with builder sales incentives, lifted the pace of new home sales for the month,” says Jerry Konter, chairman of the National Association of Home Builders. “However, due to higher construction costs and ongoing supply chain issues, the median price of a newly-built single-family home in November was $471,200 – 9.5% higher than a year ago.”
“The impact of higher construction costs has made building entry-level homes particularly difficult – and this is where we see the greatest amount of pricing out for the housing market,” notes NAHB chief economist Robert Dietz. “In November 2021, 13% of new home sales were priced below $300,000. That share has now fallen to 7%.”
A new home sale occurs when a sales contract is signed or a deposit is accepted. The home can be in any stage of construction, including the planning stages, under construction or completed.
In addition to adjusting for seasonal effects, the November reading of 640,000 units is the number of homes that would sell if this pace continued for the next 12 months.
A year ago, there were just 32,000 completed, ready to occupy homes available for sale. By November 2022, that number increased to 64,000, reflecting flagging demand and more standing inventory due to lower sales.
Zillow currently has over 1,500 listings for homes for sale here in Hamilton County.
If you’re looking to build, buy or sell in Chattanooga and the surrounding areas, check out the membership directory at www.HBAGC.net for a list of reputable professionals to guide you.