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Home buyers are turning to new-home construction because of the limited inventory in the resale market. Builders continue to try to ramp up the number of homes they’re building to meet demand, but labor, lot, and material shortages continue to press on home prices and building timelines.
Sales of newly built single-family homes rose 12.4% in November compared to October, according to the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. Despite that monthly jump, new-home sales are down 14% compared to a year ago.
“Our members are seeing strong buyer traffic as continued low mortgage rates are helping fuel sales,” says Chuck Fowke, chairman at the National Association of Home Builders. “However, builders are still grappling with major supply chain issues and soaring materials costs, which are causing construction delays.”
The median sales price for a new home in November increased to $416,900, an 18.8% jump over a year ago. Builders attributed that double-digit growth to rising development and material costs.
“Despite the increase in sales, housing affordability remains a major concern,” says Danushka Nanayakkara-Skillington, the NAHB’s assistant vice president of forecasting and analytics. “With building material pricing, the challenge for builders in 2022 will be dealing with higher input costs while making sure home prices remain within reach for American home buyers.”
Read the latest housing report from the National Association of REALTORS® on existing-home sales: Sales Up as Buyers Rush to Lock in Mortgage Rates