The U.S. Commerce Department reported that sales of new single-family homes dropped in January following sales gains in November and December. “The preliminary sales pace declined 16.6 percent for the month to a seasonally adjusted annual rate of 937,000 units, down 20.1 percent from a year earlier,” said the National Association of Home Builders (NAHB).
No region of the U.S. was immune from the downturn in new home sales, although some suffered more than others. NAHB said sales for the month were down in 18.7 percent in the Northeast, 8.1 percent in the Midwest, 9.7 percent in the South and 37.4 percent in the West.
Meanwhile, the inventory of new homes for sale declined in January to 536,000 units, “the lowest since February 2006 and equivalent to a 6.8 months’ supply at the January sales pace,” said NAHB.
The Commerce Department said the median price of new homes sold in January was $239,800, “slightly higher than the month before but 2.1 percent below a year earlier,” said NAHB.
However, NAHB is not panicking.
“The falloff in new home sales in January largely reflected a return to more normal weather conditions, following the weather-related increase in sales late last year,” said NAHB Chief Economist David Seiders. “NAHB’s monthly surveys actually have been showing modest improvements in builders’ confidence regarding home buyer demand since last September.”
Seiders added that new home sales “continue to show a lot of month-to-month volatility, but the pattern has been fundamentally flat since the middle of last year. The market is being supported by solid gains in employment and personal income, as well as by a historically low interest rate structure, and we expect those supports to be well-maintained as we move forward. Furthermore, builders continue to use both price and non-price incentives to bolster sales and reduce inventory.”