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Tuesday, March 23, 2021

New Home Prices

by Calculated Risk on 3/23/2021 01:29:00 PM

As part of the new home sales report released this morning, 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 2021 was $349,400. The average sales price was $416,000."

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.

Then the average and median house prices have mostly moved sideways since 2017 due to home builders offering more lower priced homes.  Prices picked up again during the pandemic.

The average price in February 2021 was $416,000, up 7.7% year-over-year.  The median price was $349,400, up 5.3% year-over-year.

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

New Home Sales by PriceVery few new homes sold were under $150K in February 2021 ("Less than 500 units" in February 2021, rounded down to zero).  This is down from 30% in 2002.  In general, the under $150K and under $200K brackets are going away.   

The $400K+ bracket increased significantly after the housing recovery started, but has been holding steady recently.  A majority of new homes (about 63%) in the U.S., are in the $200K to $400K range.