But

new-home
sales
are
a
relative
bright
spot.
According
to

U.S.
Census
Bureau
data,
these
sales
topped
683,000
in
2024,
which
is
the
second
consecutive
annual
gain.
And
it’s
a
higher
number
than
at
any
point
since
the
financial
crisis,
other
than
2020
and
2021
during
the
post-pandemic
boom.

The
existing-home
sales
slump
coupled
with
a
strong
tally
of
new
sales
has
resulted
in
new-home
sales
accounting
for
14.4%
of
all
transactions.
That’s
the
highest
share
for
new
sales
since
2005,
which
was
during
the
building
boom
driven
by
cheaper
housing,
looser
credit
requirements
and
high
demand
for

mortgage-backed
securities.

In
the
current
climate,

homebuilders
have
advantages
over
existing-home
sellers.
High
mortgage
rates
have
kept
potential
sellers
out
of
the
market
because
many
secured
rock-bottom
rates
from
the
period
after
the
financial
crisis
through
2022,
when
the


Federal
Reserve
began
to
rapidly
raise
interest
rates
to
combat
inflation.

But
builders
have
a
slight
immunity
to
this
because
they
can
offer

rate
buydowns.
This
is
particularly
true
for
builders
with
in-house
mortgage
businesses.
They’re
also
more
responsive
to
demand
than
home
sellers,
as
they
can
build
at
a
pace
to
match
demand.

For
this
reason,
new-home
sales
tend
to
be
more
volatile
than
existing-home
sales.
Since
the
beginning
of
2020,
the
average
monthly
change
for
existing-home
sales
is
-0.27%.
For
new-home
sales,
it’s
+0.43%.

Sales
finished
2024
on
a
relative
high
note.

Existing-home
sales
in
December
clocked
in
at
a
seasonally
adjusted
annual
rate
of
4.24
million,
the
highest
since
February
2024.
And

December
new-home
sales
finished
at
a
seasonally
adjusted
annual
rate
of
698,000,
their
highest
pace
since
2021.

Whether
2025
will
be
a
better
market
depends
on
who
you
ask.


HousingWire’s
comprehensive
2025
housing
market
forecast
calls
for
existing-home
sales
to
be
slightly
higher
at
4.2
million.
While
that’s
an
improvement,
it
would
be
the
third-lowest
tally
since
1995.

Most
forecasts
are
more
bullish,
with
NAR
predicting
4.9
million
existing-home
sales,


Fannie
Mae
expecting
4.5
million
and


Bright
MLS
expecting
4.4
million.
The
average
among
the
forecasts
analyzed
by
HousingWire
is
4.35
million.