January New Home Sales Slip

New home sales started the year on a down note, falling by nearly 8 percent from December and by 1 percent from a year ago.

HUD and the Census Bureau reported sales of new single-family houses in January fell to 593,000 on a seasonally adjusted annual rate, 7.8 percent from the revised December rate of 643,000 and 1.0 percent down from a year ago.

Regionally, sales were mixed. In the largest region, the South, sales fell by 14.2 percent in January, seasonally annually adjusted, to 301,000 units from 351,000 units in December and fell by nearly 11 percent from a year ago. In the Northeast, which was hit by several winter storms, sales dropped by 33.3 percent to 24,000 units from 36,000 in December and fell by 44.2 percent from a year ago.

In the West, sales rose by 1 percent to 193,000 units from 191,000 units in December and improved by 33.1 percent from a year ago. In the Midwest, sales jumped by 15.4 percent to 75,000 units in January from 65,000 in December and improved by nearly 3 percent from a year ago.

The report said the median sales price of new houses sold in January 2018 fell to $323,000. The average sales price fell to $382,700. The seasonally adjusted estimate of new houses for sale at the end of January was 301,000, representing a 6.1-month supply at the current sales rate.

Mark Vitner, senior economist with Wells Fargo Securities, Charlotte, N.C., said the January report surprised consensus estimates.

“Upward revisions going back to October suggest some weather-related disruptions were still playing out in the data,” Vitner said. But he noted the rise in new home inventories “sets the stage for an active spring selling season as demand is strong. Activity may be challenged by rising mortgage rates as the Fed tightens policy in 2018, however.”