The U.S. new home market enters 2023 in distress. Political Calculations' initial estimate of the market capitalization of new homes for November 2022, the data for which was released just before the holidays, is $25.35 billion. This time-shifted, trailing-year average is 15.8% below its December 2020 peak in nominal terms and is 25.5% below its inflation-adjusted peak.

The annotations in this chart emphasize the role and timing of inflation and rising interest rates in contributing to the shrinking market for new homes. That shrinking market contributes to economic headwinds in the U.S., where a healthy new home market can account for 3-5% of the nation's GDP. For longer term context, here are links to the latest updates to our charts tracking the market cap for new homes and its component price and sales data since January 1976.

• Trailing Twelve Month Average New Home Sales Market Capitalization in the United States
• Trailing Twelve Month Average of the Mean Sale Price of New Homes Sold in the United States
• Trailing Twelve Month Average of the Annualized Number of New Homes Sold in the United States

We'll take a separate look at the impact of inflation and rising interest rates for new homes on their affordability in the very near future.

References

U.S. Census Bureau. Monthly New Residential Sales, November 2022. [PDF Document]. Accessed 23 December 2022. 

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