New Home Sales Fell in November
Stocks in the construction industry fell after sales of newly built homes came in below expectations for November, according to CNBC.
Lennar, Pulte, DR Horton, and Toll Brothers fell 2 percent when the data was released. According to the US Census, new home sales fell 11 percent in November from October. Sales were at an annualized rate of 841,000, down from 979,000 at the top in July. Sales are still up 20.8 percent year-over-year.
Some analysts predict that the pullback is due to home prices surging lately. The median price of newly built homes rose 2.2 percent year-over-year to $335,300.
“In a sign that affordability will remain a primary challenge, sales of entry-level homes — priced below $200,000 — accounted for only 2% of total sales,” said George Ratiu, senior economist at realtor.com. “These numbers reflected the slowing economy, rising unemployment claims, and growing affordability challenge, which hampered activity despite record-low mortgage rates.”
“I do have to wonder whether the aggressive home-price gains is beginning to impact that first-time buyer. It was Toll Brothers after all that used the term ‘sticker shock’ for some when they reported earnings a few weeks ago,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group.