New home sales fell short of estimates in January, as signed contracts dropped 10.5% from December. This decline was partlyattributed to high interest rates and adverse winter weather, particularly in the South. However, the impact was mitigated by an upward revision to December’s sales figures. On a year-over-year basis, sales decreased by 1.1%.
What’s the bottom line?
The limited inventory of existing homes, coupled with strong buyer demand, has shifted attention to the new construction market. But additional inventory is necessary to meet this buyer interest. As of January’s end, there were495,000 new homes available for sale, yet only 115,000 had been completed, with the rest either under construction or not yet started.
