A lot of expectations and optimism were probably dashed by the December report on new home sales from the Census Bureau and Department of Housing and Urban Development. Analysts were expecting sales to build on the November seasonally adjusted annual estimate of 719,000 units which was an increase of 1.3 percent from October. Indeed, every prediction from those polled by Econoday was at that level or higher, with a consensus of 728,000 units. Instead, not only did the number fail to reach the bottom of that range, but November's number was revised down substantially.

Seasonally adjusted sales during the month were estimated at an annual rate of 694,000 units, a 0.4 percent decline from the new November estimate of 697,000 sales. New home sales activity is still, however, much stronger on an annual basis, exceeding the December 2018 estimate of 564,000 by 23.0 percent. It was the fifth straight month that new home sales had exceeded that of the same month in 2018 by double digits.

On a non-adjusted basis there were 47,000 homes sold during the month down from 51,000 in November. In December 2018 new home sales were estimated at 38,000 units. Total sales for 2019 were 681,000 units, 10.3 percent above the year end 2018 figure of 617,000.

The median price of a homes sold during the month was $331,400 compared to $329,700 a year earlier. The average prices for the two periods were $384,500 and $381,800 respectively. Thirty percent of the 47,000 homes sold during the month were priced between $200,000 and $299,000 and 28 percent were in the next higher $100,000 tier. Only 10 percent of home sold were priced below $200,000.

At the end of the reporting period there were 327,000 new homes available for sale. This is an estimated supply sufficient for 5.7 months at the current sales pace, a 3.6 percent uptick from the 5.5-month supply in November. However, in December 2018 there were an estimated 346,000 homes for sale, a 7.4-month supply.

There were 11.8 percent fewer sales in the Northeast than in November, but sales were 11.1 percent higher than a year earlier. The Midwest saw increases of 10.1 percent for the month and 16.9 percent year-over-year. The South's sales declined 15.4 percent and 1.1 percent from the two earlier periods while sales in the West soared by 31.0 percent and 99.2 percent.