After a disappointing start to the year, new home sales rebounded in February, rising 1.8% from January to a 676,000-unitannualized pace. This rebound would have been even stronger, but inclement weather in the Northeast dampened activity in that region. On a year-over-year basis, sales were up 5.1%. January’s sales figures were also revised higher.
The median home price dropped 3% from January to $414,500, but this dip was not due to a nationwide decline in home prices. The median sales price represents the middle-priced home sold, which can be influenced by the mix of home sales in each month. In this case, the decline in sales in the more expensive Northeast and West regions shifted the median price slightly lower, even as home prices continue to rise across the country overall.
What’s the bottom line?
The limited inventory of existing homes, combined with strong buyer demand, has shifted focus to the new construction market. However, more inventory is needed to fully meet this buyer interest. As of February, there were500,000 new homes available for sale, but only 119,000 had been completed, with the rest still under construction or not yet started.