US: Home sales strong on lower prices - Wells Fargo

New home sales soared 16.9% in November showed today’s data. According to analysts at Wells Frago, with higher interest rates making potential buyers hesitant, builders are offering larger discounts, which is apparent in the price data. 

Key Quotes: 

“After a delay due to the recent partial government shutdown, the Census Bureau reported a 16.9% surge in new home sales during November. The 657,000 unit pace registered during the month was the strongest since March.”

“Sales are 7.7% lower year-over-year, a comparison made difficult by the strong end to 2017. Overall, the trend in new home sales remains lightly positive, with year-to-date sales up 2.7%. 

“Buyers were likely enticed by significant discounting. Over the past year, the median price has fallen 11.9%, which equates to a $41,000 drop. Much of that discounting has been in the West, where sales slowed.”