Demand for new houses was up 15.3 percent from a year ago, today’s report showed, today’s Commerce Department report showed. The median price for a new house rose 14.9 percent in November from the same month a year ago to $246,200. Builders are reporting increased construction costs and higher prices for undeveloped land.
“Part of the home price increases have been offset by construction cost increases,” said Ara Hovnanian, chief executive officer of Hovnanian Enterprises Inc., based in Red Bank, New Jersey.
“However, the gradual and steady nature of this recovery is helping to keep construction costs from going out of control,” Hovnanian said on a Dec. 13 earnings call. “Our current costs are still significantly below our costs during the cyclical peak.”
Home sales increased in two of four regions last month, led by a 21.1 percent jump in the South. Demand in the Northeast increased 12.5 percent. Purchases fell 17.8 percent in the West and 12.5 percent in the Midwest.
The supply of homes at the current sales rate dropped to 4.7 months from 4.9 months in October. There were 149,000 new houses on the market at the end of the month compared with 147,000 in October.
Sales of new homes, which are calculated when purchase contracts are signed, are considered a timelier barometer than purchases of existing dwellings, which are calculated when a contract closes. New construction accounted for 6.7 percent of the residential market in 2011, down from a high of 15 percent during the boom of the past decade.
Sales of existing homes rose more than forecast in November to a three-year high, the National Association of Realtors reported last week. Previously owned homes advanced 5.9 percent to a 5.04 million rate.
With fewer distressed properties on the market, prices have started to stabilize. Home prices climbed more than forecast in October, a report yesterday showed. The S&P/Case-Shiller index of property values in 20 cities increased 4.3 percent from October 2011, the biggest 12-month advance since May 2010.