ARLINGTON, Va.—New-home sales rose 4.3% from December's upwardly revised rate of 885,000 annualized units to 923,000 units in January. NAFCU's Curt Long noted new homes for sale are at their highest level since May.
"New homes for sale at the end of the period are at their highest level since May, though supply is still extremely tight and median prices continue to rise, now up 5.3% year-over-year," said Long, NAFCU’s chief economist and vice president of research.
The median new-home price, non-seasonally adjusted, declined from $353,100 in December to $346,400 in January.
But, as CUToday.info reported here, a recent increase in rates led to a downturn in new mortgage applications.
Sales rose in three regions during the month, rising 12.6 % in the Midwest followed by the West (+6.8%) and the South (+3%). Sales in the Northeast declined by 13.9%. Compared to a year ago, sales rose in the South (+40.4%), the Midwest (+10.3%), while the Northeast saw sales decline 8.8% and the West dropped 6.3%.
Four Months of Supply
Based on current month sales, there were four months of supply in January, down 0.1 months from December. The number of unsold homes left on the market was up 2.7% at 307,000 units, representing a 5.5% reduction from year-ago inventory levels, Long said.
"Homebuilder sentiment is down a bit after peaking in November but remains at an elevated level," Long added. "Permits were up 22.5% versus January 2020, while housing starts were down 6%, so new supply is coming but will not arrive until the second half of the year. Tailwinds include low mortgage rates and an even tighter market for existing homes, which is pushing more buyers into new homes. NAFCU expects the solid growth in new home sales to continue.”