Sales of new single-family homes slid last month in a disappointing development for a housing market trying to crawl out of its recent troubles.
New home sales dropped 0.3 percent from January’s revised rate of annual transactions, according to a monthly report from the U.S. Census Bureau. The annual rate, as determined by the bureau and the Department of Housing and Urban Development, was 662,000 units.
Despite dropping slightly from the previous month, the sales market for new homes does look rosier than it did a year ago. The annual rate is 5.9 percent higher than the rate recorded in February 2023.
The median price of a new home sold in February was $400,500, down 7.6 percent from a year ago. In a welcome development, the seasonally-adjusted estimate of new homes for sale at the end of last month was 463,000, an 8.4-month supply at the sales rate. That represented the highest supply level since October 2022, according to Bloomberg.
Regionally speaking, the Northeast and Midwest saw new home purchases decline last month, while the South and West both saw increases, the latter hitting its highest pace since last summer.
The tepid overall sales numbers for new homes is likely a slight bummer for builders, especially when compared to a sharp increase in existing home sales.
“The increase in the supply of existing homes could be slightly eroding part of the advantage builders enjoyed most of last year,” Zillow senior economist Orphe Divounguy said in a statement.
Builders have been hammering away ad nauseam. Last month, Privately-owned housing starts increased 5.9 percent year-over-year for an annualized rate of 1.52 million starts.
The new home market could right its mixed recovery in the coming months, especially as homebuilders offer incentives to move units and look to build smaller and cheaper properties.
“The change in the size of new homes that has helped to lower prices combined with incentives should continue to support new home sales this spring shopping season,” Divounguy said.
Read more
Construction
National
New home construction leaps across U.S., highest in two years
Residential
National
Existing home sales notched worst year in 30 years
Politics
New York
The Daily Dirt: Red tape is strangling NYC’s housing supply