In February, new single-family home sales reached a seasonally adjusted annual rate of 640,000, as reported by the U.S. Census Bureau and the Department of Housing and Urban Development.
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This figure is 1.1% higher than the revised rate for January, which stood at 633,000, but is 19% lower than the February 2022 estimate of 790,000.
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Ali Wolf, chief economist at Zonda, notes that “homebuilders currently have a greater advantage in the housing market than we’ve seen before. Limited inventory in the resale market has made new construction the only option for some buyers. Additionally, builders don’t have an emotional connection to a home’s price like a resale seller would.”
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In February, the median sales price for new homes was $438,200, while the average sales price was $498,700.
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At the end of February, the seasonally adjusted estimate of new homes available for sale was 436,000, equating to an 8.2-month supply at the current sales rate.
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Wolf adds, “For many builders, adjusting prices to make buyers feel like they’re getting a deal can help overcome pricing objections. If mortgage rates are the main hurdle, builders can also make adjustments to bring them down. This flexibility in ‘finding the market’ has allowed new-home builders to achieve three consecutive months of sales growth.”
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