New home sales increased by 2.3% in December despite challenged housing market
Yahoo Finance Live anchors break down December new home sales data.
Video Transcript
- We're talking about new home sales for the month of December. Coming in at an annual pace of 616,000. That's just about 4,000 better than estimated.
But it looks like there was an increase in new home sales month over month as a result, perhaps, of some revisions, 2.3% increase versus the 4.4% decline that was estimated.
Got to dig into these numbers and figure out what exactly happened there. As I said, there must have been a month earlier revision. We know that the housing market has been a little bit challenged here.
And that has been reflected particularly in the new home sales numbers. Because in terms of new construction, there are a number of different, shall we say, barriers to building new construction, particularly from a zoning perspective around the country.
- Housing affordability has gone way down, of course, with the rise in interest rates. And I think back to earlier this week. We've got a report from NerdWallet saying 2/3 of people surveyed in that particular poll were looking for a housing market crash.
It just really goes to show how fast sentiment in housing has turned because this rise in rates have really made it unaffordable to buy a home.
- Just to give a little bit more clarity on the data here. So the revision lower for the November number took it down to 602,000. So that's why you then saw a month over month increase.
However, if you compare December 2022 with December 2021, you're talking about 616,000 last December versus 839,000 the prior December. So that gives you a more sharp picture of what we have been seeing over time in the housing market, guys.
- Yeah. Keeping an eye on shares of companies like Toll, Lennar, of course, all of these companies that have to do with delivering on some of those new homes that take on construction projects. And for Toll stock, they're holding onto gains here on the day by about 1.8%.
And then additionally just checking in on KB Homes very quickly while we may as well here. That's up by about 1%. You've got a good look at all of them across the board.
So seeing green pretty much across some of those homebuilder staples if you will. But it is, again, this larger question of how will they continue to burn through some of that backlog as well that they have of existing orders with some of the new homes.
