Sales of new homes surged in November by 12.4% compared to October’s revised number, hitting a seasonally adjusted, annual rate of 744,000, while the median sales price hit a new high of $416,900, the U.S. Census Bureau and the U.S. Department of Housing and Urban Development reported.

On a year-over-year basis, the pace of new-residential sales measured in November was down 14%. October’s originally reported pace of new-home sales was revised downward to 662,000 from 745,000.

The seasonally adjusted estimate of new houses for sale at the end of September was 402,000, representing a supply of 6.5 months at the current sales rate, according to a press release.

The share of completed homes/ready-to-occupy inventory in November was 9.7%, down from 14.5% a year ago, while the share of new-home inventory that was not started increased to 27% from 22%, First American Deputy Chief Economist Odeta Kushi said in a press release, noting that before the pandemic, completed homes made up the largest share of new homes sold, while today, it is homes under construction.

“Borrowing costs remain low, demographic-fueled demand is strong, and existing-home inventory remains near record lows, making a new home an attractive option,” Kushi said. “Yet, higher construction costs (labor, lumber, materials) are being passed on to buyers, resulting in higher new-home prices.”

By region, the number of new homes sold in the West in November soared by 53.2% to 242,000, while new homes sold in the Northeast rose 15.6% to 37,000 and ticked 2.7% higher in the South to 412,000. New-home sales fell 25.4% to 53,000 in the Midwest.

“November is historically a slower month for sales because of the Thanksgiving holiday, so the continued growth this month continues to reflect buyers’ optimism and predicts a strong ending to the year,” RCLCO Real Estate Consulting principal Kelly Mangold said. “New home starts were also up this month, as many factors continue to align to make the for-sale market robust, including low interest rates and families seeking more space for work from home arrangements.”