New-home sales rebound in November after storm-stricken month

New-home sales in the U.S. rebounded last month as builders and consumers sealed deals that had been delayed by storms in the South, and buyers took advantage of heavy sales incentives.

Sales of new single-family homes increased 5.9% last month to a 664,000 annualized rate, according to government data issued Monday. That was in line with the median estimate of economists surveyed by Bloomberg, who expected 669,000.

Builders last month played catchup especially in the South, the nation's biggest homebuilding region, where hurricanes in the fall sank October sales. In November, sales in the South recovered nearly 14%. Meantime, they increased in the Midwest to the fastest pace since 2021. Sales in the Northeast and West declined.

Potential buyers also have more to choose from. Last month, the supply of new homes for sale increased to the highest since the end of 2007.

That's offering some help on the affordability side. The median sale price of a new single-family home decreased 6.3% last month from a year ago, and is now $402,600.

Contractors are also helping by offering customers so-called mortgage buydowns, or making payments on their behalf to lower their rates, and occasionally cutting prices. And builders have felt more confident since Donald Trump won last month's election, hoping the incoming administration will cut red tape and allow for easier development.

Still, Wall Street is losing interest in the sector, leery that builders' sales incentives are eating into their profit margins and concerned about high borrowing costs. Shares of the iShares U.S. Home Construction exchange-traded fund hit an all-time in mid October, but have since shed 20% of their value.

And mortgage rates — which are approaching 7% again — may stay elevated for some time after briefly falling to a two-year low in September. Last week, updated projections from the Federal Reserve showed fewer interest-rate cuts in 2025, with policymakers firmly set on quashing inflation.

In the existing-homes market, house hunters are starting to accept this new reality, as sales increased last month to the fastest pace since March.

New-home sales are seen as a more timely measurement than purchases of previously owned homes, which are calculated when contracts close. However, the data are volatile. The government report showed 90% confidence that the change in new-home sales ranged from a 12.7% decline to a 24.5% gain.

The report, along with another on durable goods orders, was originally scheduled for release Tuesday, but both were moved up a day by the Census Bureau following President Joe Biden's executive order excusing federal-government workers from duty on Dec. 24