December was a bad month for US new home sales, recording their biggest drop in nearly 18 months.
The Commerce Department reported Thursday new home sales declined 9.3%, to a seasonally adjusted annual rate of 625,000 units last month. The percentage decrease was the largest since August 2016.
A strong labor market—also at full employment—has resulted in a demand for housing that has not been matched by an increased supply.
The result? House price inflation outpacing wage growth, which has priced some first-time buyers out of the current market.
The good news is that December’s slump has caused the supply to rise to a healthier ratio compared to demand, which should result in less inflation and more first-time buyers in the next few months.
– Allen A Garzone II, Garzone Real Estate, Inc, Boston Real Estate Agent
