Analysts say uptick is about more than just buyer demand.
New data released by the Department of Commerce this morning shows that the number of properties that builders began construction on increased in December to a seasonally adjusted annual rate of 954,000, up 37% from a year prior. In a normal market, more supply would help keep prices in check, but the opposite trend is currently underway: New home prices are rising. And this time, experts say, it’s not just buyer demand or fancy finishes on new homes that are driving prices up—it’s the result of a bidding war among builders. “In the last 12 months, [it’s] been ramping up,” says Jack McCabe, an independent housing analyst in Deerfield Beach, Fla. For buyers, these rising costs can translate to higher asking prices for new homes, says Brad Hunter, chief economist at Metrostudy. Some housing analysts say it’s already having an effect. Nationally, median new home sales prices hit $246,200 in November, up 4% from a month prior and 15% from a year prior, according to the Census Bureau.
Read more at Market Watch.
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