New home sales were down in Nov. and so were prices. Lower prices have been the norm since builders reduced the square footage of their products to increase affordability and competition.

Forty-seven new homes sold last month for an average price of $351,727. Last year, 60 were sold for an average price of $404,547.

The average size last month was 1,804 sq. ft. Last year it was 2,085 sq ft.

So far this year 671 new homes have sold in the counties monitored by the Northeast Tennessee Association of Realtors (NETAR). During the same period last year there were 534 new home sales.

New home sales and single-family housing starts are expected to improve in 2025 when compared to other types of housing. According to Realtor.com, a 13.8% increase is expected.

Realtor.com says buyers can also expect builders to make homes more affordable, especially for first-time buyers. They will accomplish that by continuing to focus on smaller homes and other cost-cutting measures.

One thing of note to watch is the number of new homes sold for less than $300,000. Nationwide they were up from 14% in 2023 to 17% in 2024.

Locally, the Nov. market share was little better with 18% of new home sales for less than $300,000. During the first 11 months of last year, 17% of the new homes went for less than $300,000.

The trend is expected to continue in 2025, giving homebuyers more affordable options, according to Realtor.com.

While there’s ample good housing market news on the horizon, challenges exist. How the market fares depends largely on mortgage rates, buyer attitudes, and the overall economy.

Most mortgage rate outlooks are for an average of 6%.