| Consensus | Consensus Range | Actual | Previous | |
| Annual Rate | 728K | 690K to 755K | 745K | 737K |
Highlights
in December, sales fell 37.3 percent in the Northeast where home prices have not moderated as much and supply may be more limited as current homeowners remain put. Sales jump 31.7 percent in the Midwest where available housing stock may be more abundant and prices facing less upward pressure. Sales fell 6.7 percent in the South where some weaker local markets in Florida may have restrained activity. Sales are up 9.0 percent in the West where a decline in mortgage rates makes a material difference in home affordability in an expensive market.
The month average for a Freddie Mac 30-year fixed rate mortgage declined from 6.24 percent in November to 6.19 percent in December. This is enough of a drop to motivate homebuyers who hesitated in hope of a lower rate. Some home buyers are opting for adjustable rate mortgages (ARMs) to improve affordability. The average Freddie Mac ARM rate was 5.48 in December after 5.51 in the previous month.
The median price of a new single-family home is up 4.2 percent to $414,400 in December after $397,600 in November but is down 2.0 percent from $423,000 a year ago. Home prices typically rise in the first half of the year and decline through the second. The uptick in December prices suggests that at least some buyers are motivated by current mortgage rates and that competition for the more sought-after units is a bit firmer.
New single-family home sales are for contracts signed in December, but which may not close until a few weeks later. December shows 9 percent of the total sales are for units not yet started which means that sales will not close until after completion. Those buyers may have an opportunity to qualify for an ever lower mortgage rate depending on the terms of the contract. Units under construction account for 35 percent of sales. This is good news for builders that projects under construction will not have excess inventory in the future. Units completed are 55 percent of sales which takes up some of the slack in existing inventory.
Market Consensus Before Announcement
The delayed reports are expected to show sales at an annual 735K rate in November and 728K rate in December.
* Originally scheduled for 1/27/2026
Definition
New home sales measure the number of newly constructed homes with a committed sale during the month. The level of new home sales indicates housing market trends and, in turn, economic momentum and consumer purchases of furniture and appliances.
Description
This provides a gauge of not only the demand for housing, but the economic momentum. People have to be feeling pretty comfortable and confident in their own financial position to buy a house. Furthermore, this narrow piece of data has a powerful multiplier effect through the economy, and therefore across the markets and your investments. By tracking economic data such as new home sales, investors can gain specific investment ideas as well as broad guidance for managing a portfolio. Each time the construction of a new home begins, it translates to more construction jobs, and income which will be pumped back into the economy. Once the home is sold, it generates revenues for the home builder and the realtor. It brings a myriad of consumption opportunities for the buyer. Refrigerators, washers, dryers and furniture are just a few items new home buyers might purchase. The economic"ripple effect" can be substantial especially when you think a hundred thousand new households around the country are doing this every month. Since the economic backdrop is the most pervasive influence on financial markets, new home sales have a direct bearing on stocks, bonds and commodities. In a more specific sense, trends in the new home sales data carry valuable clues for the stocks of home builders, mortgage lenders and home furnishings companies.
