ARLINGTON, Va.—New-home sales fell 2.0% in February to 772,000 annualized units, while January saw a downward revision of 13,000 units. Compared to last year, February sales were 6.2% lower.
“New home sales fell again in February after December's 12-month high and contrary to economists polled by the Wall Street Journal,” said NAFCU Chief Economist and Vice President of Research Curt Long. “According to the National Association of Home Builders/Wells Fargo Housing Marketing Index, builder confidence declined modestly in February.
"However, builder assessments of foot traffic and future sales fell by larger amounts than the overall index,” continued Long. "Historically low existing home inventory has led to strong traffic for new homes, but rising mortgage rates may be starting to dampen demand."
As CUToday.info reported here, four economists have recently stated the trend toward higher home prices could actually reverse itself sometime in the near future.
Down in 2 Regions, Up in 2 Regions
Sales fell in two Census regions with the West falling 13%, followed by the South (-1.7%). Sales in the Northeast rose 59.3% and in the Midwest by 6.3% on the month.
Based on current month sales, there were 6.3 months of supply in February, up by 0.2 months from January. Unsold homes left on the market increased by 9,000 homes to 407,000, representing a 40% increase from year-ago inventory levels.
“Meanwhile, supply chain constraints are still impacting construction timelines," noted Long. "While builder inventory is at a solid level overall, completed homes make up just over 8% of that inventory.
‘All-Time Low’
"That is an all-time low for that statistic dating back over 20 years, and compares to a pre-COVID level of 24%," concluded Long. "NAFCU expects sales volume to be fairly flat for several months while buyers absorb a new level of mortgage rates and builders continue to struggle with construction delays."
Of note, the median home price, non-seasonally adjusted, fell by 6.3% in February to $400,600, which is 10.7% higher than last year.
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