The median sales price of a new single-family home is down about $66,000 compared to a year ago, evidence that the U.S. housing market is moderating as mortgage rates come down and more units hit the market.
The median sales price for a new single-family home in December 2023 was $413,200, a 13.8% drop from the median sales price of $479,500 during the same month in the preceding year, according to the latest Monthly New Residential Sales Report from the U.S. Census Bureau and the Department of Housing and Urban Development.
The annual rate of new single‐family home sales was at a seasonally adjusted 664,000 in December, roughly 8% above the revised November rate of 615,000 and 4.4% above the rate in December 2022. Overall, an estimated 668,000 new homes were sold in 2023, which was up 4.2% from the 2022 figure of 641,000.
“The solid new home sales rate in December was fueled by a lack of existing inventory in the resale market and declining interest rates,” said Alicia Huey, chairman of the National Association of Home Builders (NAHB). “The rise in sales also coincides with our latest builder surveys, which show a marked increase in future sales expectations because of falling mortgage rates.”
In general, falling mortgage rates in the closing weeks of 2023 helped attract buyers off the sidelines in December, as previously reported by The Dallas Express. That month the daily average mortgage rates fell to 6.61%, the lowest level since May 2023 and down from a two-decade high of 8.03% in late October.
“New home sales ended the year on a high note thanks largely to falling interest rates and a decline in existing home sales,” said Danushka Nanayakkara-Skillington, NAHB’s assistant vice president for forecasting and analysis.
Even though the moderating interest rates bode well for new home sales in 2024, Nanayakkara-Skillington warned that “long-term issues such as a shortage of buildable lots, a lack of skilled labor, and excessive regulations will continue to pose challenges for builders.”
Within this difficult climate, City of Dallas council members and development officials have claimed that they are making permitting a priority to help developers build homes fast. While Dallas is turning out residential permits for single-family homes quicker than in previous years, overall building permit activity under City Manager T.C. Broadnax has been down year over year.
At any rate, proposed fee adjustments by Dallas’ Development Services Department could see developers paying considerably more for permits due to it currently facing a $22.3 million deficit, as covered in The Dallas Express.
