Haver Resources
Feb 26

U.S. New Home Sales Decline in January; Prices Surge

Summary
  • Sales reverse earlier increase, falling to lowest level in three months. Extremely cold temperatures in much of country may have discouraged home buying.
  • Lower sales are posted across the country except the West.
  • Median sales price near record.

New single-family home sales declined 10.5% (-1.1% y/y) to 657,000 (SAAR) during January after increasing 8.1% in December to 734,000, revised from 698,000. November sales were revised to 679,000 from 674,000 according to the U.S. Census Bureau. The Action Economics Forecast Survey expected 680,000. The decline in January sales occurred as the average 30-year fixed-rate mortgage rose to an average 6.96% last month from 6.72% in December, according to Freddie Mac. It compares to a low of 6.18% averaged in September.

By region, home sales fell across most of the country last month. New home sales in the Northeast declined 20.0% (-48.1% y/y) to 28,000 in January after rising 34.6% in December. Sales in the Midwest were off 16.7% (-13.6% y/y) to 70,000 after falling 5.6% in December. In the South, new home sales declined 14.8% (+6.8% y/y) to 392,000 following two straight months of strong increase. Working higher were new home sales in the West. The 7.7% monthly rise (3.1% y/y) to 167,000 came after a 20.2% December gain.

The median sales price of a new home increased 7.5% (3.7% y/y) to $446,300 in January after a 4.7% rise to $415,000 in December. It was just shy of the $460,300 record in October 2022. The average sales price of a new home edged 0.1% higher (-3.4% y/y) to $510,000 in January following a 6.5% December increase. The average price was 5.8% below a high of $541,200 in July 2022. These sales price data are not seasonally adjusted.

The number of unsold new homes on the market rose 1.4% (7.4% y/y) to 495,000 in January, after a 0.2% December increase. The latest figure was 6.2% above a low of 466,000 in October 2022. The seasonally adjusted months’ supply of new homes for sale rose to 9.0 months in January after falling to 8.0 months in December. The latest reading, remained above a low of 6.9 months in May 2023.

The median number of months a new home stayed on the market increased to 3.0 months in January, the highest since April 2022, after rising to 2.7 months in December. The latest number was increased from the record low of 1.5 months in both September and October of 2022, but was well below a high of 5.1 months in March 2021. These figures date back to January 1975.

New home sales are recorded when the sales contract is signed. New home sales activity and prices are available in Haver’s USECON database. The consensus expectation figure from Action Economics is available in the AS1REPNA database.

Current Perceptions About Monetary Policy from the Federal Reserve Bank of San Francisco is available here.

About The Author

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Thomas J. Moeller

Haver Analytics is pleased to bring Thomas J. Moeller’s commentaries on the state of the U.S. economy to its clients.

Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters’ Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.

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