A recent U.S. Census Bureau report showed that new home sales in January fell 9.2 percent to a seasonally-adjusted annual rate of 494,000 units. This is 5.2 percent below the January 2015 estimate of 521,000. The median sales price of new houses sold in January 2016 was $278,800; the average sales price was $365,700. The seasonally adjusted estimate of new houses for sale at the end of January was 238,000. This represents a supply of 5.8 months at the current sales rate.
“The new home sales report for January released today by the Commerce Department reveals little solid evidence regarding what happened last month in the new home market,” says Realtor.com chief economist, Jonathan Smoke. “The underlying survey data for January were, as we have seen in previous months, so statistically limited that the headline decline in sales should be taken with caution.”
“The unusually large drop in sales in the Western region masks what has directionally been a steady improvement in the sales of new homes since 2010,” says Quicken Loans vice president Bill Banfield. “Sales momentum may build if the lower interest rates, which we’re currently experiencing, last through the spring buying season.”
“January is typically the slowest month of the year for new home sales,” Smoke continues. “Combine that with a report based on a small survey of builders and you get this scenario where there is little we can rely on in the report. We do know, however, that 2015 produced a 15 percent increase in new home sales over 2014, and that momentum should continue into 2016 with strong and growing demand and limited supply available from existing homes. The best piece of data in the report was that the median new home prices continue to decline, which is not because of widespread discounting but rather a result of builders offering more affordably priced entry-level homes.”
For more information, visit www.census.gov.