The monthly and annual sales of new residential properties improved, and monthly activity was most improved in the Midwest.
New home sales finished 2015 on an up beat, climbing to a seasonally adjusted annual rate of 544,000 units in December.
It was the highest level of new sales since 2007, according to a news release from the National Association of Home Builders.
Sales, which were jointly reported by the Census Bureau and the Department of Housing and Urban Development, strengthened compared to November, when the rate was 491,000. The month-earlier rate was originally reported at 490,000.
New home sales also advanced from December 2014, when the rate was an upwardly revised 495,000.
“The December sales report is a great end to a very strong year,” NAHB Chairman Ed Brady said in the statement. “As we move forward in 2016, we should see the housing market continue to make lasting gains.”
Genworth Mortgage Insurance Chief Economist Tian Liu called the numbers “stronger than expected.”
“This is a promising sign for the housing market as we move into 2016,” Liu said in a written statement. “We expect the strong increase in new home sales to continue as the fundamentals in the housing market remain strong and newer vintage homes are in short supply.”
NAHB Chief Economist David Crowe said low interest rates and an improving economy are motivating prospective buyers to make a new-home purchase.
New home sales in the Midwest were up by nearly a third between November and December — the biggest month-over-month increase of any region — to a seasonally adjusted annual rate of 75,000, the Census Bureau said.
A 21 percent increase left the rate at 167,000 in the West, while a nearly 21 percent rise in the Northeast put the rate there at 29,000.
The weakest region was the South, where the rate was hardly changed from November at 273,000.
Including a non-seasonally adjusted 38,000 new home sales in December 2015, full-year U.S. activity without seasonal adjustments totaled 501,000 units, more than the 437,000 closings for all of 2014.
Last year finished with 237,000 homes for sale. The inventory expanded from 231,000 a month earlier and 212,000 a year earlier.
Stronger demand prompted builders to increase their inventories, NAHB’s Crowe said.
It would take 5.2 months to clear out the supply of new homes for sale,
slightly less time than the 5.6 months in November and slightly more time than 5.1 months in December 2014, the bureau reported.
Last year’s average sales price was
$355,500, more than the $345,800 average in 2014.
The December 2015 average fell to $346,400 from $364,200 a month earlier.
The median price in 2015 was $293,600, rising from the prior year’s $282,800.
Last month’s median price was $288,900, slipping from $297,000 one month earlier.
