Sales of new one family homes vaulted to their highest level in 10 months and barely missed recording the best total since early 2008.
Purchases rose 10.8 percent in December to a 544,000 annualized rate. This was just below the February 2015 pace of 545,000, which remains the highest annual turnover since February 2008 in the fading days of the housing bubble. Economists in the Bloomberg survey had predicted 500,000 new sales.
The 502,000 new homes sold over last year was a 14.1 percent improvement over 2014. It was the highest annual sales total since 2008, a year that started with a 627,000 annual sales pace in January but ended at 377,000 in December as the financial crisis took firm hold.
Though mortgage rates remain near historical lows and job creation if not wage growth has achieved a post-recession high in the past two years, new home sales languish far below their historical averages. From 1986 through the end of 2000 new home sales averaged 697,000 annually, almost 40 percent above the current level, despite the increase in population in the last 30 years.
Sales increased in all four U.S. regions, led by a 31.6 percent surge in the Midwest, from 57,000 to 75,000. Purchases rose 21.0 percent in the West, from 138,000 to 167,000, 20.8 in the Northeast, 24,000 to 29,000, and were essentially flat in the South, gaining just 1,000 to 273,000.
It would take 5.2 months at December's selling rate to clear the current inventory of homes on the market, down from 5.6 months in November and the shortest since August. There were 237,000 new houses offered for sale at the end of December compared with 231,000 a month earlier.
The nationwide median sales price decreased 2.7 percent in December to $288,900 and is down 4.3 percent on the year. The post-recession high was $307,600 in September 2015.
Construction was begun on 1.107 million new homes in 2015. That is the highest total since 1.393 million in 2007, though it is below the 1.438 million annual average from 1986 thought 2000.
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