Wednesday, March 25, 2015

New Home Prices: More homes priced in the $200K to $300K range

by Bill McBride on 3/25/2015 12:31:00 PM

Here are two graphs I haven't posted for some time ...

As part of the new home sales report, the Census Bureau reported the number of homes sold by price and the average and median prices.

From the Census Bureau: "The median sales price of new houses sold in February 2015 was $275,500; the average sales price was $341,000."

The following graph shows the median and average new home prices.

New Home PricesClick on graph for larger image.

During the housing bust, the builders had to build smaller and less expensive homes to compete with all the distressed sales.  When housing started to recovery - with limited finished lots in recovering areas - builders moved to higher price points to maximize profits.

Recently some builders have announced new homes at lower price points.

The average price in February 2015 was $341,000 and the median price was $275,500.  Both are above the bubble high (this is due to both a change in mix and rising prices), but are below the recent peak.

The second graph shows the percent of new homes sold by price.

New Home Sales by PriceLess than 5% of homes sold were under $150K in February 2015.  This is down from 30% in 2002 - and down from 20% as recently as August 2011.  The under $150K new home is probably going away.

However there has been a pickup in homes sold in the $200K to $300K range (Up to 37.8% of homes in February 2015).

Yesterday on New Home Sales:
New Home Sales at 539,000 Annual Rate in February
Comments on New Home Sales