New home sales rebound in December

Wells Fargo Research Team Wells Fargo

Summary

New residential sales end 2023 on a high note

New home sales jumped 8.0% in December, rebounding from November's surprise 9.0% slump. A step-down in mortgage rates, plentiful inventory and falling prices all contributed to the upswing in sales as the new home market continued to show resilience in the face of the broader housing market slump. Overall, new home sales averaged a 668K-unit pace in 2023, up from a 641K-unit pace in 2022. Improving affordability and a glut of supply heading into the busy spring selling season have builders increasingly optimistic. A recent upturn in home buyer sentiment and mortgage applications for purchase suggest rising optimism on the demand side as well. In our view, the major themes of the new home market in 2023 remain intact and should prevail heading into 2024.

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Wells Fargo Research Team

Wells Fargo

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