New Home Sales Jump 12 Percent In 2016

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Due to mortgage rate flux, low inventory, and bad weather, buyers closed on fewer homes in December

January 27, 2017

Photo: Public Domain Pictures

Even after a dip in December, 2016 finished as a strong year for new home production. Buyers closed on 563,000 properties last year, a 12.2 percent increase compared to the year before, according to Realtor.com.

December was a little rough, though, as sales fell 10.4 percent from November and 0.4 percent from December 2015. Jonathan Smoke, the chief economist of Realtor.com, says that low inventory, bad winter weather, and rising mortgage rates in the wake of the presidential election contributed to the lack of sales.

In December, the median price of a new home was $322,500, and the median price of an existing home was $232,200. Of the new homes sold last month, 8,000 of them were priced $500,000 or above, while 5,000 were priced below $200,000.

Smoke expects that more, and more affordable, homes will go up in regions like the South and Midwest, where land is cheaper and there are fewer regulatory hurdles for builders to jump over.

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