US new home sales hit three-year high in 2024: govt
New home sales in the United States reached their highest in three years in 2024, according to government data released Monday, boosted in recent years by a lack of existing homes on the market.
An estimated 683,000 new homes were sold in 2024, marking a 2.5 percent rise from the year before, said the Department of Commerce.
Sales in December also beat expectations with a seasonally adjusted annual rate of 698,000, 3.6 percent above November's revised 674,000 rate.
Sales of new homes have been boosted in recent years as existing homeowners have been reluctant to sell their properties while interest rates remained high.
The Federal Reserve rapidly hiked the benchmark lending rate in 2022 to tamp down surging inflation at the time, and has since begun cautiously lowering it.
In December, the median sales price of new houses sold was $427,000 -- picking up from November as well.
But for all of 2024, the median cost was lower than that of 2023, data showed.
"Sales may have been propped up by unseasonably warm weather in December," said Nancy Vanden Houten, lead US economist at Oxford Economics.
"But we think the pace of sales may also indicate that homebuyers are proving to be more resilient than expected to mortgage rates around seven percent," she added.
She warned that recent fires in California and harsh winter weather this month will likely bog down sales in January.
Given that mortgage rates should decline "modestly over the course of the year," Vanden Houten said she expects sales to improve past January.
Carl Weinberg and Mary Chen, of High Frequency Economics, noted that a lack of existing homes continues driving buyers towards new properties, though this remains a small slice of the market.
"High mortgage rates and prices continue to impact affordability," they said in a note. "Home sales are improving, but they are not taking off."
The property market is sensitive to changes in interest rates, and the Fed's next policy meeting concludes on Wednesday.