New home sales bounced back to 842,000 in December, representing a 1.8% increase over the previous month, the Commerce Department reported on Thursday. The 11% month-over-month decline in November was a jarring halt to the red-hot housing market that had new home sales in excess of 949,000 from July through October.
While many saw that decline as a waning of homebuyer interest, the lack of inventory and uncertainty around the election may have more likely been the reason. Inventory remains at record lows, with only 302,000 new homes on the market. This lack of inventory, combined with record low interest rates, continues to drive housing prices up, with the median price reaching $355,900 in December. This represents a 3.5% increase over November.
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