Last February scored a seventh-month high for the new residential housing market as more new homes were sold despite higher borrowing costs. This is according to the latest monthly new residential sales data jointly released by the U.S. Census Bureau and the Housing and Urban Development.
More New Homes Sold in February
There were 592,000 new homes, on a seasonally adjusted basis, sold in February 2017 compared to 558,000 estimated in January. Between the two months, this represented a 6.1% increase in new single-family homes sold.
Moreover, the February 2017 new home sales record was a 12.8% increase from February 2016’s 525,000 new home units sold.
February’s sales also marked the first time it exceeded 622,000 new home sales recorded in July 2016.
Which region had the most active homebuying market for new homes in February?
- South: 313,000 new homes sold.
- West: 157,000 new home units sold.
- Midwest: 89,000 new homes sold.
- Northeast: 33,000 new homes sold.
How much does a new home cost?
According to the Census/HUD data, the median sales price of a single-family home in February was $926,200 while its average sales price was $390,400, a decline from the $307,000 median sales price and $355,300 average sales price listed back in January 2017.
The decline may have to do with most new homes sold in February are located in the South, which is less pricy compared to the Northeast that had the lowest number of sold new homes during the relevant period.
For-Sale Home Inventory
By the end of February 2016, the supply of new homes grew to 266,000 units compared to 262,000 new homes for sale in January 2017 (1.5% increase) and 242,000 new-home inventory in February 2016 (9.9% increase).
The number of new homes for sale in February is worth a 5.4-month supply given the current sales pace. The Associated Press pointed to builders ramping construction for new homes in order to meet demand and boost sales.
Nevertheless, according to AP, the demand for homes continues to outpace construction gains.
February Insights and Trends
Last February was a picture of health in terms of new residential home sales. Some experts attributed to last month being exceptionally warm as per the National Oceanic and Atmospheric Administration, according to Bloomberg.
The higher mortgage rates apparently did not deter home buyers who locked in rates to avoid further rate increases.
Indeed, the solid growth in jobs cited by the FOMC and improving household balance sheets reported by Bloomberg helped consumers offset the costs brought by rising mortgage rates.
Justin McHood is a managing partner at Suited Connector and has been recognized by national media outlets as a financial expert for more than a decade.