January New Home Sales Fall
New home sales fell by a larger-than-expected 9.2 percent in January, HUD and the Census Bureau reported yesterday.
HUD and the Census Bureau said new single-family house sales dropped to 494,000 (seasonally adjusted) compared to 544,000 the month before. This represented a 5.2 percent shortfall from the January 2015 estimate of 521,000 new home sales.
“Despite the disappointing monthly reading, the overall trend in new home sales remains intact,” said Wells Fargo Securities Senior Economist Mark Vitner. He noted that analysts expected some reversal this month following three months of solid gains.
“The drop in new home sales follows several other softer housing market indicators for the month,” Vitner said. “Housing starts registered an unexpected decline and the National Association of Home Builder’s measure of homebuilder sentiment fell to a nine-month low.”
HUD/Census said the median sales price of new houses sold in January equaled $278,800, down from $288,900 in December. The average sales price rose from $346,400 in December to $365,700 last month.
The seasonally adjusted estimate of new houses for sale at the end of January rose slightly to 238,000, representing a 5.8-month supply at the current sales rate, HUD and Census reported.
Vitner said inventory remains a key barometer for new home sales. “Inventories rose slightly in January, marking the sixth consecutive month of gains and the series’ highest level in over five years,” he said. December’s inventory represented a 5.2-month supply. “That said, inventories are at a historically low level.”
This consistent pickup in inventories bodes well for the upcoming spring selling season, Vitner noted. “Lean supply levels tend to constrain home sales,” he said.
Meanwhile, appraisal volume rose 1.9 percent the week of Feb. 14–the most recent data available–reported a la mode Inc., Naples, Fla. The software firm’s National Appraisal Volume Index increased for the fourth straight week.
“Lower rates continue to bolster the housing market,” said a la mode analytics director Kevin Golden.
