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(Bloomberg) -- Sales of new U.S. homes rose in November to a seven-month high, underscoring strong demand for housing against a backdrop of low borrowing costs and desire for more space during the pandemic.
Purchases of new single-family homes increased 12.4% to a 744,000 annualized pace following a downwardly revised 662,000 in October, government data showed Thursday. The median estimate in a Bloomberg survey of economists called for a 770,000 rate.
The figures point to strong housing demand in the final quarter of the year despite still-high prices. However, rising Covid-19 cases in the U.S. and overseas could create supply chain and labor headwinds in the coming months, slowing construction and leading to further inventory shortages.
The new home sales report, produced by the U.S. Census Bureau and the Department of Housing and Urban Development, showed the median sales price of a new home rose 18.8% from a year ago to a record $416,900.
There were 402,000 new homes for sale as of the end of November, up from a month earlier. At the current sales pace, it would take 6.5 months to exhaust the supply of new homes, compared with four months a year ago.
Growing Backlogs
Of the homes sold in last month, construction on 221,000 had yet to be started, the most since May, suggesting backlogs are growing. Already completed homes 164,000, the lowest since August.
Sales rose in all regions but the Midwest. The West posted the largest gain, with the strongest pace since January.
Separate data Wednesday showed that existing home sales, which make up 90% of home purchases, increased for a third straight month in November.
New-home purchases account for about 10% of the market and are calculated when contracts are signed. The new-homes data are volatile; the report showed 90% confidence that the change in sales ranged from a 4.8% decline to a 29.6% increase.