New home prices are on the rise. A November 26th industry report from research firm Sterne Agee notes that October’s median new home sales price in the U.S. exploded to an all-time high of $305,000. Of note, median U.S. new home sales price was $262,000 in September and $264,000 in October 2013.

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October sets all-time record median new home sales price

Sterne Agee homebuilding and furnishings analysts Jay McCanless and Annie Worthman note that the Census Bureau’s monthly new home median price data stretches all the way back to January 1963, and the $305k median price hit last month is the highest price ever. The buyer mix has clearly transitioned towards luxury over the last three years, and there have been several new records set for highest price over the last 36 months, but October’s reading is the first time ever over $300,000.

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Further details on new home sales data

The SA report also highlights 9% that of new home sales in October were priced above $750,000 versus a trailing twelve month average of 4.1%. Homes that sold for between $150,000 and $200,000 represented 12% of October new home sales versus a TTM average of 18%, and homes that sold for $201,000 to $300,000 were 28% of October sales versus a TTM average of 33%. This divergence may revert to the mean next month, but median prices have trended higher for new home sales three years now, and absent any meaningful change in mortgage underwriting standards for entry-level buyers, McCanless and Worthman anticipate more median price records will be set in 2015.

New home sales volume up year over year

Of note, adjusted new home sales increased 2.8% year over year in October, compared to a 19.4% gain in both September and in August. The SA analysts suggest that October’s monthly sales data does not make them anticipate that either demand or sales volumes will trend significantly higher over the next couple of quarters.

Sterne Agee recommends luxury home builders

Sterne Agee’s top picks among the luxury home builders include Ryland (RYL, Buy, $45 PT), PulteGroup (PHM, Buy, $23 PT), and WCI Communities (WCIC, Buy, $21 PT), all of whom derive significant revenues and profits from the higher-end home segments.