February New Home Sales Dip Slightly

February new home sales fell slightly, but not enough to worry analysts.

HUD and the Census Bureau on Friday reported sales of new single-family houses in February fell slightly to a seasonally adjusted annual rate of 618,000, 0.6 percent lower than January’s upwardly revised 622,000 and 0.5 percent higher than a year ago (615,000).

Regionally, declines in the West and Midwest offset gains in the South and Northeast. In the West, sales fell by nearly 18 percent to 164,000 units, seasonally adjusted, in February from 199,000 in January but improved by 3.1 percent from a year ago. In the Midwest, sales fell by 3.7 percent to 79,000 units in February from January’s 82,000 and fell by 8.1 percent from a year ago.

In the largest region, the South, sales rose by 9 percent to 338,000 units, seasonally adjusted, in February from 310,000 in January and improved by 0.6 percent from a year ago. In the Northeast, sales rose by 19.4 percent to 37,000 units in February from 31,000 units in January and improved by nearly 9 percent from a year ago.

The median sales price of new houses sold in February stood at $326,800; the average sales price was $376,700. The seasonally adjusted estimate of new houses for sale at the end of February rose to 305,000, representing a 5.9-month at the current sales rate.

Mark Vitner, senior economist with Wells Fargo Securities, Charlotte, N.C. said new home sales are “about where they were expected to be for the month.”

“Inventories have increased, particularly in the South,” Vitner said. “Inventories of completed homes remain exceptionally lean.”