New home sales show solid growth in February
Sales of newly built, single-family homes rose to a seasonally adjusted annual rate of 667,00 units in February after an upwardly revised January report, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. This is the highest sales pace since March 2018.
The sales report was delayed due to the partial government shutdown.
“The recent decline in mortgage rates have helped boost sales activity as home buyers take advantage of these lower interest rates,” said Greg Ugalde, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Torrington, Conn.
“The new home sales data continue to show potential to grow sales at affordable price points that would be attractive for the entry-level buyer,” said NAHB Chief Economist Robert Dietz. “However, builders need to be mindful of housing costs as they try to meet this demand.”
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 667,000 units is the number of homes that would sell if this pace continued for the next 12 months.
The inventory of new homes for sale was 340,000 in February and has been relatively flat since December. The median sales price was $315,300 as most sales growth took place in the $200,000 to $400,000 sales class.
Regionally, and on a monthly basis, new home sales rose 26.9 per cent in the Northeast, 28.3 per cent in Midwest and 1.8 percent in the South. The West remained unchanged.