It’s time for a holiday toast. A decade of builders’ hard work and resiliency has finally paid off: September, October, and November's new home sales marked three months of the highest demand since 2007. Although the road forward is still uncertain with housing shortage and high costs, the end of 2019 has brought a glimmer of prosperity that the housing market has not seen in a long time. Mortgage rates are low, demand is high, and builders are picking up steam as they turn back to entry-level and affordable housing. The industry has come a long way since everything came crashing down in the Great Recession, so take out a bottle of bubbly and toast to a hopeful new decade.
Sales of new homes increased in November, capping the best three months for demand since 2007 and reflecting sustained momentum in a residential real estate market that’s helping to underpin the economy.
Single-family home sales rose 1.3% to a 719,000 annualized pace from a downwardly revised October, government data showed Monday. In the three months through November, purchases averaged a 720,000 pace, the strongest in 12 years. An index of U.S. homebuilder stocks pared losses following the report.
Increased demand for new homes is being fueled by historically cheap borrowing costs, the lowest jobless rate since the 1960s and stronger income growth. The strength in housing should continue to fuel gains in residential construction, a direct input into the government’s calculation of gross domestic product.