Jan 26, 2024 - Economy
Why new home sales soared and existing homes plunged in 2023
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All the juice in the housing market in 2023 was in new home sales — and that's likely to continue this year.
Driving the news: New home sales rose 4.4% in December 2023, compared to the previous year, per census data out Thursday.
- Sales were up 8% from November — likely helped along by falling mortgage rates.
Why it matters: Buyers are going where the houses are — and the deals, too.
Zoom in: While existing homeowners are sitting on their heels, homebuilders are itching to sell, offering plenty of incentives — including lower rates on mortgages.
- Inventory of new homes is up. At the current sales rate, there's an 8-month supply of houses — meaning that's how long it would take to sell all the homes on the market. It's 3.2 months for existing homes.
- And prices are down. They've been falling for months and were down 14% in December from last year.
Reality check: New homes are a relatively small part of the housing market overall — and in some areas of the country are hard to find.
- About 3.8 million existing homes sold in the U.S. last year, compared with about 670,000 new ones.
Go deeper: New home sales are surging — here's why
