After revised data on new home sales in January reflected continued strength in the sector, new home sales eased in February, but remained up over this time last year, according to the latest data from the U.S. Census Bureau and the Department of Housing and Urban Development (HUD).
The latest new-home-sales report shows new single‐family home purchases in February were at a seasonally adjusted annual rate of 662,000, or 0.3% below the revised January rate of 664,000. This figure is 5.9% above the February 2023 estimate of 625,000, according to the report.
The median sales price of new houses sold in February 2024 was $400,500. The average sales price was $485,000.
The seasonally adjusted estimate of new houses for sale at the end of February was 463,000. This represents a supply of 8.4 months at the current sales rate, the report showed.
“New home sales dipped slightly from February but continue to track above last year’s pace,” said Bright MLS Chief Economist Dr. Lisa Sturtevant. “New construction continues to be an outsized share of the housing inventory. With existing homeowners locked into low mortgage rates, homebuilders have benefited, with more prospective homebuyers looking at new homes.
“Affordability is still a big challenge in the housing market, particularly for first-time homebuyers,” Sturtevant continued. “But homebuilders have options to attract buyers that other, individual home sellers do not. Home builders have been offering to pay down points on a buyer’s mortgage or can offer builder financing at below market rates. To some extent, home builders can also switch up the product they deliver. We’ve seen more builders bring smaller, less expensive homes to the market in recent months. The median price of a home sold in February was $400,500, which was 7.6% lower than a year ago.
“Inventory of existing homes should loosen up some this spring, but the new home market will remain strong,” Sturtevant concluded.
Carl Harris, chairman of the National Association of Home Builders (NAHB), commented, “While new home sales remained flat in February, our latest home builder surveys show increased levels of confidence driven by the ongoing lean levels of existing home inventory. As interest rates subside over the course of 2024, additional home buyers will be priced into the market and new construction will be needed to meet this demand.”
“A slight uptick in mortgage rates held back the pace of new home sales in February,” added NAHB Chief Economist Robert Dietz. “Our latest builder surveys show that roughly one-quarter of builders reported cutting home prices in March. The price cuts, in combination with building slightly smaller homes, can be seen in today’s data that show a 7.6% year-over-year decline for median new home prices.”
