Redfin: Sales of New Homes Down 8% in January

Redfin, Seattle, said its analysis of 85 major markets found sales of new single-family homes fell by 8 percent year over year in January, the fifth consecutive month of year-over-year declines.

The report said new home sales fell year over year in all four major U.S. regions. But the size of the drop was smaller than in December in all regions except the West, where sales fell by more in January than they did a month before.

“The shrinking size of sales declines, paired with falling interest rates, may be helping to improve builder confidence, which has been on the rise since December,” said Redfin Chief Economist Daryl Fairweather. “Still, buyers understand that the market is shifting in their favor and have become more sensitive to high home prices. That added sensitivity could continue to put a damper on the sales of new homes, which tend to be more expensive than comparable existing ones.”

The report said nationally, sales fell by 12.6 percent in January from December and by 8 percent from a year ago. Sales in the South fell by 11.8 percent from December and by 4.7 percent from a year ago. In the West, sales fell by 13.2 percent from December and by 16.5 percent from a year ago. In the Midwest, sales fell by 13.1 percent from December and by 8.7 percent from a year ago. In the Northeast, sales fell by 17 percent from December and by 6.6 percent from a year ago.

Redfin said the trend in new residential sales the past few months has been similar to that of home sales overall, which fell by 7.6 percent year over year in January, the sixth consecutive month of declines. On a month-over-month basis, sales of new single-family homes nationwide dropped 0.2 percent in January, to $339,000.

HUD and the Census Bureau will release its New Homes Sales report later this week.