Average sales price of new homes sold in the U.S. 1965-2023

After a dramatic increase in 2022, the average sales price of a new home in the United States dropped slightly in 2023 from 540,000 to 511,100 U.S. dollars. The average sales price of a new home exceeded 400,000 U.S. dollars for the first time in 2021.

What drives the increase in house prices?

One of the major factors behind the dramatic increase in house prices was the low cost of borrowing. In 2020 and 2021, mortgage rates reached a historic low: Homebuyers could take out a loan with a 15-year mortgage rate of less than 2.5 percent. Demand rose and in 2021, the number of housing transactions peaked at almost seven million.

How has the coronavirus (COVID-19) pandemic affected Americans’ homeownership plans?

Overall, the coronavirus (COVID-19) pandemic has positively influenced the homeownership plans of Americans in 2020. According to a survey among U.S. adults, 28 percent of Millennials were more interested in buying a home due to the coronavirus pandemic compared to 13 percent who were less interested.