Sunday, August 26, 2018

New Home Prices

by Bill McBride on 8/26/2018 08:11:00 AM

As part of the new home sales report released last week, 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 July 2018 was $328,700. The average sales price was $394,300."

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 July 2018 was $394,300, and the median price was $328,700.  Both are well 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 2% of new homes sold were under $150K in July 2018.  This is down from 30% in 2002.  In general, the under $150K bracket is going away.   

The $400K+ bracket has increased significantly since the housing recovery started.  Still, a majority of new homes (about 60%) in the U.S., are in the $200K to $400K range.