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New Home Prices

As part of the new home sales report released yesterday, the Census Bureau reported the number of homes sold by price and the average and median prices.

From the Census Bureau: “The median sales price of new houses sold in May 2021 was $374,400. The average sales price was $430,600.”

The following graph shows the median and average new home prices.

New Home Prices Click on graph for larger image.

During the housing bust, the builders had to build smaller and less expensive homes to compete with all the distressed sales.  When housing started to recovery – with limited finished lots in recovering areas – builders moved to higher price points to maximize profits.

Then the average and median house prices mostly moved sideways since 2017 due to home builders offering more lower priced homes.  Prices picked up during the pandemic, and really picked up recently.

The average price in May 2021 was $430,600, up 17% year-over-year.  The median price was $374,400, up 18% year-over-year.  

The second graph shows the percent of new homes sold by price.

New Home Sales by PriceVery few new homes sold were under $200K in May 2021 (about 1.4% of all homes).  This is down from 56% in 2002.  In general, the under $200K bracket is going away.   

The $400K and greater than $500K+ brackets increased significantly over the last decade.  A majority of new homes (about 61% in May) in the U.S., are in the $200K to $400K range.

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