New home sales cooled off in January, according to the latest report from the Census Bureau and the Department of Housing and Urban Development.
According to their analysis, new home sales reversed course from December, declining 6.9% in January. In fact, sales of new single-family houses fell to 607,000.
Not only is this level down from December’s revised rate of 652,000, but it is also 4.1% down from the previous year’s level of 633,000.
Realtor.com Chief Economist Danielle Hale said although existing homebuyers are capitalizing on the recent decline in mortgage rates, it didn’t spark buyer interest in new homes in January.
“Prices of new homes sold actually declined 3.8%, as just below-median priced homes became a greater share of sales,” Hale continued. “Given the rising cost pressures builders are facing, this could suggest continued difficulty for new homes and new construction ahead."
The median sales price of new homes sold was $317,200 and the average sales price was $373,000.
The seasonally adjusted estimate of new homes for sale by the end of the month was 336,000 in January, representing a supply of 6.6 months at the current sales rate.
Navy Federal Credit Union Corporate Economist Robert Frick said new home sales fell even more than expected, but help is on the way.
“Housing starts rose 18.6% in the last report, which was particularly strong for single-family homes,” Frick continued. “Many home shoppers looking for their first house last year were discouraged by rising prices, rising mortgage rates and low supply. Now, with mortgage rates retreating, prices moderating and some improvement in supply on the way, 2019 may develop into a much better home hunting ground."
