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January 24, 2019 at 10:53 AM EST
Redfin Report: New-Home Sales Saw Double-Digit Drops to Close Out 2018
Redfin releases analysis of new-home sales in November and December 2018 to bridge the data gap during the government shutdown

SEATTLE, Jan. 24, 2019 /PRNewswire/ -- (NASDAQ: RDFN) -- Sales of new homes in all four major U.S. regions dropped in the last two months of 2018, according to a report released by Redfin (www.redfin.com), the next-generation real estate brokerage. The year-over-year trend was especially drastic in the Northeast, where new-home sales fell by 16.1 percent in December.

Below is a look at the annual drop in single-family new-home sales (seasonally adjusted) across the country in the final two months of last year:

Region

Nov. 2018

Dec. 2018

Midwest

-2%

-13.4%

Northeast

-12.3%

-16.1%

South

-2.9%

-10.3%

West

-8.6%

-13.4%

National

-4.6%

-11.6%

Of all four regions, sales of new homes has been in negative territory the longest in the Northeast. That region hasn't experienced growth since January 2017, according to Redfin data.

"All around the country homebuyers were backing off at the end of last year due to high prices and high mortgage interest rates, and 2018 tax reform made it even more expensive to buy high-priced homes in high-tax states like Massachusetts, Connecticut and New York. New homes tend to be pricier than existing homes, which is one reason sales of new homes dropped off so much in the Northeast," said Redfin chief economist Daryl Fairweather.

Sales of new homes could pick up in the coming months. Builder confidence is up two points to 58 this month, thanks in part to the recent decline in mortgage rates and continued job growth. Another factor that could contribute to an increase in new-home sales is a decline in the cost of building materials. The price of materials came down 1.8 percent in December.

The U.S. Department of Housing and Urban Development, in conjunction with the Census, typically reports monthly data on new-home sales. Due to the partial shutdown of the federal government, the data for the end of 2018 hasn't been released. To bridge this gap, Redfin released its November and December 2018 numbers on single-family new-home sales, garnered from multiple listing services (MLSs) and county records across the markets that Redfin serves.

Redfin is also making its new construction data available for download. Below are data highlights for the fourth quarter of 2018:

  • The median sale price for new homes in the fourth quarter of 2018 was $371,200, essentially unchanged from the same period in 2017. Compare that with existing homes, which had a median sale price of $287,000, up 3.1 percent from the year before.
  • Supply of new homes was up 7.4 percent annually in the fourth quarter, while supply of existing homes was up 5 percent.
  • The typical new home was on the market for 91 days, five days less than the year before. Existing homes spent a median of 43 days on market, two days less than the year before.

Visit the Redfin Data Center for downloadable sets of monthly data on new construction prices, sales, inventory and other new residential market statistics: https://www.redfin.com/blog/data-center.

For the full report on new-home sales, visit: https://www.redfin.com/blog/2019/01/nov-dec-new-home-sales.html.

About Redfin

Redfin (www.redfin.com) is the next-generation real estate brokerage, combining its own full-service agents with modern technology to redefine real estate in the consumer's favor. Founded by software engineers, Redfin has the #1 brokerage website in the United States and offers a host of online tools to consumers, including the Redfin Estimate, the automated home-value estimate with the industry's lowest published error rate for listed homes. Homebuyers and sellers enjoy a full-service, technology-powered experience from Redfin real estate agents, while saving thousands in commissions. Redfin serves more than 85 major metro areas across the U.S. The company has closed more than $60 billion in home sales.

For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin's press release distribution list, subscribe here. To view Redfin's press center, click here.

 

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SOURCE Redfin

Redfin Journalist Services, Michaela Morales, 206-588-6863, press@redfin.com