The housing market cooled significantly amid ongoing price corrections and near-stagnant homebuyer activity in the final two quarters of 2022, and along with that waning demand came a dip in new-home sales. Home builder sentiment fell for the 12th straight month in December as new-home sales dropped 26.6% year-over-year to a total of 616,000.
At year-end, 2022 saw 16.4% fewer new homes sold than in 2021, and that steady decline is largely due to persistent home price gains. The median sale price of new houses in December was $442,100, according to Zillow.
Home builders have been desperate to attract buyers, but, as of December, the relentless affordability crisis has dropped builder sentiment for twelve straight months. Builders are all but throwing incentives at buyers to attract them back to the new home market, but that doesn’t seem like enough to combat high mortgage rates and prices. Even though both rates and prices fell in December, new home sales slipped further from the 2021 peak.