New home pending sales may have been down to end the year but sales were positive month-over-month, according to Zonda’s latest New Home Pending Sales Index.
- Y-O-Y: The December PSI came in at 95.3, representing a 39.9% decline from the same month last year.
- M-O-M: The pending home sales index was up 2.7% from November. This was only the second time all year that index saw an increase month-over-month.
Rough Time In The West. Nine of the top ten worst metro areas year-over-year were in the West. Denver led the way with a 68.2% drop followed by Phoenix (-67.5%) and San Francisco (-63.8%).
- Baltimore had the best year with sales only down 3.3% followed by Charlotte (-17.1%) and Philadelphia (-22.0%)
Prices. Despite a steep sales drop, home prices ended the year up across the board. Entry-level homes jumped 9.6% to $337,282, move-ups were up 8.9% ($526,445), and high-end homes ended the year up 7.7% ($902,905.)
Analysis. Ali Wolf, Zonda’s Chief Economist said a historically bad end to 2022 is paving the way for a stabilizing market in 2023. “The leveling off of financing costs combined with builders ‘ripping the band-aid off’ regarding home prices and normal seasonality has allowed for green shoots in the housing market to start 2023…Price discovery is happening quickly in the new home market and housing demand in many metros across the country is showing signs of either stabilizing or improving compared to the second half of last year.”