New-home sales in the U.S. tumbled to a five-month low, suggesting red-hot demand is cooling amid resurgent COVID-19 cases and other signs of a slowing economy.
Purchases of new single-family houses decreased 11% to a 841,000 annualized pace in November from a downwardly revised 945,000 rate in the prior month, government data showed Wednesday. The median projection in a Bloomberg survey of economists called for 995,000. The median selling price rose 2.2% from a year earlier to $335,300.
The data dim housing’s status a bit as a bright spot in an otherwise shaky economy, and the drop in sales may reflect a lack of available inventory as builders struggle to meet demand fueled by ultra-low mortgage rates. Affordability could also be playing a role, though a new $900 billion stimulus package, approved by Congress on Monday, may boost family finances and keep demand robust.
Shares of U.S. homebuilding companies fell after the report.
A report Tuesday showed that sales of previously owned homes also fell in November, as surging prices and a record-low supply constrain demand.
Wednesday’s report showed the number of properties sold for which construction hadn’t yet started decreased to a four-month low of 288,000 in November, while the number of homes for sale edged up to 286,000.
At the current sales pace, it would take 4.1 months to exhaust the supply, the highest since June.
The drop in sales was concentrated in the West and Midwest regions. The 59,000 pace in the Midwest was the smallest since early 2016, while the South and West each recorded their lowest totals since June.
The new-home sales report, released jointly by the Census Bureau and Department of Housing and Urban Development, tends to be volatile from month to month, often with significant revisions.
More must-read finance coverage from Fortune:
- 14 of the biggest bankruptcies of 2020—and who might be next in 2021
- Upstart CEO talks major IPO “pop,” A.I. racial bias, and Google
- Biden wants to change how credit scores work in America
- Term Sheet readers predict which markets will boom in 2021
- Citron calls this the “most ridiculous” IPO of 2020