New Home Sales Still Falling, Prices and Inventory Up

There was much better news in February than in January regarding new home sales.  Those sales had been reported down by 7.8 percent on top of a 9.3 percent decline in December. Sales pulled out of that nosedive last month, eking out an 0.6 percent increase from January.  In addition, the January number was revised up from 593,000 to 622,000.

The U.S. Census Bureau and the Department of Housing and Urban Development said February sales were at a seasonally adjusted annual rate of 618,000 units.  The February numbers also served to pull sales ahead of those a year earlier by 0.5 percent.

The estimated numbers were only slightly below the expectations expressed by analysts polled by Econoday.  Their projections had ranged from 600,000 to 660,000 units with a consensus of 620,000.

On a non-adjusted basis there were 51,000 newly constructed homes sold during the month. This is a 4,000-unit improvement on the January number but identical to sales in February 2017.

The median price of a home sold during the reporting period was $326,800 compared to $298,000 the previous February.  The average price rose from $370,500 to $376,700.

Sales rose 19.4 percent compared to those in January in the Northeast and were 8.8 percent ahead of the previous February.  There was a decline of 3.7 percent in Midwest sales, putting the region behind by 8.1 percent on an annual basis.

Sales in the South were up 9.0 percent for the month and 0.6 percent year-over-year, while there was a sharp February slump in the West; sales were down 17.6 percent. They remained 3.1 percent higher than in February 2017.

There were an estimated 305,000 new homes available for sale nationwide at the end of the reporting period, a 2.0 percent gain from January and 16.0 percent more than a year earlier.  The inventory was estimated to be a 5.9-month supply at the current rate of sales.