Simply put, we believe and continue to believe that the downside in the housing market is very limited and the upside is very significant. We believe that market is downside supported by many years of production deficits which is yielded of the supply of both rental and for sale, limited supply of both rental and for sale housing in the country. Any pull back and housing volume would be short lived as there is need for shelter in the country and there is very little inventory with almost no likelihood of mortgage foreclosures given the stringent underwriting standards of the past years.
And while demand has remained constrained by impaired consumer physiology burdens and mortgage underwriting standards and the banking regulations that discourage mortgage lending buyers have been federally returning to homeownership as the market opens up driven by the cost realities of a high priced undersupplied rental market. With recent pronouncements by FAHFA and HUD ended brining buyers back to the market with the consumer stimulus provided by lower gas prices with the employment and wages slowly mending, with lower interest rates striving greater affordability and with that multiyear deficit in production, the upside and housing remains ahead of us.
Even with questions raised about market like Huston giving the drop on oil prices and foreign purchasers giving the strong dollar their strong counter currents to act as an offset. At a million homes of multifamily and single-family production per year, we are continuing to undersupply the longer term needs of the country and this will have to be made up. The shallow slop of this recovery likely provides the steady backdrop for market share expansion in the fragmented industry and an extended recovery duration for those who are able to participate by leveraging strong capital base. I would suggest that this a very healthy environment for the wealth capitalized national builders and for Lennar Corporation [NYSE:LEN]in particular.
Our results for 2014 reflect our success in navigating this landscape and we believe that we are well position for strong results in 2015 and beyond. A combination of solid management execution of our articulated strategies and strategic investments in core assets combine to produce strong results and will enable to continue industry leading performance throughout next year. Home building of course remains a primary driver of our company’s performance. The factor that is driving this performance this quarter were job growth and encouraging dialogue regarding mortgage underwriting while the head winds remain a challenging mortgage approval process and aggressive competitor incentives. Lennar’s execution strategy remained balancing price and paid from a community by community basis to maximize our results and continuing our soft pivot towards the slower growth and the land lighter program.
The execution of this strategy produced 22% sales growth, 25.6% gross margin and 16% operating margin. Our operating margin for the full year a 14.9% matches our company high from 2005. Our self-paced end of the fourth quarter was three sales per community per month and this was flat with 2013 the fourth quarter pace of 2.9 and still is not enough to drive the operating leverage that should come from increased absorption. Nevertheless fourth quarter SGNA was 9.6 % on a 30 basis point year over year improvement. Our average sales pricing increased 7% year over year to three hundred and twenty nine thousand. During the quarter we opened 75 new communities and communities to end at 625 active communities for the 16% increase in the year over year increase. Year over year labor and material cost are up 7% to 50 dollars a square foot.
This represents a slowing of the pace of cost increases from a 10% plus year over year run rate for the past two years and that’s before the recent fall of oil prices. With oil prices down we should see cost in petroleum based products that just roofed shingle and asphalt come down as well as the broader reductions from the overall positive impact of lower transportation cost.
