Thursday, September 28, 2017

New Home Prices

by Bill McBride on 9/28/2017 01:49:00 PM

As part of the new home sales report released on Tuesday, 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 August 2017 was $300,200. The average sales price was $368,100."

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

New Home Prices Click 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.

The average price in August 2017 was $368,100, and the median price was $300,200.  Both are above the bubble high (this is due to both a change in mix and rising prices).

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

New Home Sales by PriceAbout 4% of new homes sold were under $150K in August 2017.  This is about the same as in August 2016, but down from 30% in 2002.  In general, the under $150K bracket is going away.   

The $400K+ bracket has increased significantly.  I'll break that bracket up in the future.

A majority of new homes, in the U.S., are in the $200K to $400K range.