New home sales slipped 2% in November after an 18% jump in the month prior as higher prices may be sidelining some potential buyers.
The Census Bureau reported Tuesday that sales of newly constructed homes fell to a 464,000 seasonally adjusted annual rate in November from a 474,000 rate in October.
Tuesday’s report shows that new single-family home sales are up 17% from a year ago.
“The slight drop of new home sales in November from the month prior is no cause for alarm as the market remains near a five-year high in sales,” says Quicken Loans vice president Bill Banfield.
However, the inventory of new homes for sale remains tight.
The government report shows there were just 169,000 new homes on the market as of Nov. 30, which represents a 3.1-month supply at that the current sales pace. At the end of October, there were 179,000 new homes for sale and builders completed construction on 11,000 homes in November.
Yet demand for new homes is strong and it’s pushing up prices, according to economists at IHS Global Insight. The average price hit $340,000 in November, up 17% from a year ago.
“Increased buyer traffic and low inventories combined to lift the average sales price to its highest recorded value,” the Global Insight economists said.
The Census Bureau recently reported that single-family starts in November jumped to the highest level since March 2008.