Thanks to a shortage of supply of homes for sale, prices for newly built single-family houses rose to an average $747,400 in October, up 0.3 percent from the previous month. Meanwhile, sales of new houses also rose last month, but just 0.2 percent, to its highest level since last November.
The good news is that the country’s inventory of newly built houses rose 1.2 percent last month to 215,000 homes. The previous record was 209,000 in May. The bad news is that developers are having a hard time finding the land they need to build more. The combination of weak demand and low supplies has driven up prices and made it tough for would-be buyers to compete. Construction workers are also scarce in certain areas of the country, which is making it difficult for builders to find skilled workers and labor.
Forecasters say the slowdown will continue. Matthew Pointon, chief economist for Econoday, says he expects new home sales to “do well … [but] at a slower rate” than the historic average. The months’ supply of new homes for sale is still below four, a level that suggests inventories will remain low and prices will increase next year.