Newly constructed home sales saw strong gains in November, rising by 5.2 percent month over month to reach a seasonally adjusted annual rate of 592,000 units, according to the Commerce Department's latest figures.
"New-home sales showed growing strength in 2016, and builders expect more of the same next year," said Ed Brady, chairman of the National Association of Home Builders. "A key to continued growth in 2017 will be to ensure that prospective, qualified first-time home buyers have access to affordable home loans."
The Commerce Department reported that the inventory of new homes stood at 250,000 in November, which amounts to a 5.1 month supply at the current sales pace. The median value of new homes sold in the month was $305,400.
What with the economy set to grow in the next year together with solid job growth, National Association of Home Builder's Chief Economist Robert Dietz reckons we'll see an increase in the construction of single-family home growth. He noted that builder confidence has increased on the back of an expected reduction in regulatory costs, which should bring good news for buyers and renters. Still, the pace of construction may be held back by a shortage of labor and available lots in some markets, he added.
Regionally, the Midwest and the West saw the biggest gains in new home sales, at 43.8 percent and 7.7 percent respectively. The Northeast saw no change from the previous month, while the South saw new home sales fall by 3.1 percent.