Sales of new single-family homes in February were at a seasonally adjusted annual rate of 775,000, according to estimates released by the Census Bureau and the Department of Housing and Urban Development. This is 18.2% below the revised January rate of 948,000, but is 8.2% above the February 2020 estimate of 716,000.
“While the decline was the sharpest since 2013, the drop was likely due to abnormally cold weather during the month,” says Doug Duncan, chief economist at Fannie Mae. “The new sales number continued the pattern of weak February housing data revealed by previously released figures on housing starts, for-sale listings, and mortgage applications. Therefore, we expect the drop-off to be temporary, with sales of new homes rebounding sharply in March.”
The median sales price of new houses sold in February was $349,400, while the average sales price was $416,000.
The seasonally adjusted estimate of new homes for sale was 312,000 at the end of February, representing a 4.8-month supply at the current sales rate.
“Going forward, we believe rising mortgage rates will likely soften home buyer demand modestly, while home builder constraints, including the ongoing high prices of lumber and other materials, will likely dampen the supply of new homes,” continues Duncan. “However, underlying demand remains strong. The extremely tight supply of existing homes for sale may encourage more home buyers to turn to new-home purchases.”
