New home sales slip in February

Despite falling prices and a lack of existing properties on the market, new home sales sagged in February.

The U.S. Census Bureau and the Department of Housing and Urban Development reported this morning that sales of new single‐family houses in February 2024 were at a seasonally adjusted annual rate of 662,000. The latest figure is 0.3% below the revised January rate of 664,000.

The latest report is 5.9% above the February 2023 estimate of 625,000, however.

"While new home sales remained flat in February, our latest home builder surveys show increased levels of confidence driven by the ongoing lean levels of existing home inventory,” said Carl Harris, chairman of the National Association of Home Builders (NAHB) and a custom home builder from Wichita, Kan. “As interest rates subside over the course of 2024, additional home buyers will be priced into the market and new construction will be needed to meet this demand.”

The median sales price of new houses sold in February was $400,500, falling 3.5% from a revised median price of $414,900 in January.  The average sales price for February was $485,000, dropping more than 7% from a revised average price of $534,400 in the prior month.

Mortgage rates averaged 6.78% in February compared to 6.64% in January, according to Freddie Mac.

“A slight uptick in mortgage rates held back the pace of new home sales in February,” said NAHB Chief Economist Robert Dietz. “Our latest builder surveys show that roughly one-quarter of builders reported cutting home prices in March. The price cuts, in combination with building slightly smaller homes, can be seen in today’s data that show a 7.6% year-over-year decline for median new home prices.”

The seasonally‐adjusted estimate of new houses for sale at the end of February was  463,000, representing a supply of 8.4 months at the current sales rate.