New Home Sales Hold Steady in February
According to recently published data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, sales of newly constructed, single-family homes dipped by 0.3% in February to a seasonally adjusted annual rate of 662,000. However, compared to the previous year, new home sales in February showed a 5.9% increase in pace.
According to the NAHB, mortgage rates averaged 6.78% in February compared to 6.64% in January, according to Freddie Mac.
A new home sale occurs when a sales contract is signed, or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the February reading of 662,000 units is the number of homes that would sell if this pace continued for the next 12 months.
New single-family home inventory in February remained elevated at a level of 463,000, up 1.3% from January. This represents an 8.4 months’ supply at the current building pace. A measure near a 6 months’ supply is considered balanced. However, with only a 2.9 months’ supply of existing homes for sale, new home inventory can remain above this balanced measure.
The median new home sale price in February was $400,500, edging down 3.5% from January, and down 7.6% compared to a year ago.
Regionally, on a year-to-date basis, new home sales are up 47.0% in the Northeast, 29.7% in the Midwest and 41.0% in the West. New home sales are down 13.4% in the South.
