Monthly trend confounds expectations
Sales of new single-family homes in the US increased in January – but by less than anticipated, new figures released Monday by the Commerce Department’s Census Bureau have shown.
Last month saw new home sales tick upwards by 1.5% to a seasonally adjusted annual rate of 661,000, below expectations among economists polled by Reuters of a pace of 680,000.
The rate of December sales was also revised downwards to 651,000, having previously been estimated at 664,000, with year-over-year growth for January coming in at 1.8%.
The national median sales price of a new home increased from December, rising from $413,100 to $420,700, although that figure remains lower by 2.6% than the same month in 2023.
U.S. total new single-family home sales were 661K (SAAR) in January 2024.
— U.S. Census Bureau (@uscensusbureau) February 26, 2024
➡️ https://t.co/jBHuLDODlg#CensusEconData #NewHomeSales pic.twitter.com/X2lZRiLJBl
First American economist Ksenia Potapov noted that while prices had moderated from their October 2022 peak of almost $500,000, they were “significantly higher” than pre-pandemic levels – and said challenges were continuing on the new single-family home front despite a positive overall outlook.
“Potential homebuyers are sensitive to mortgage rate fluctuations and long-term interest rates have risen again in recent weeks in response to stronger-than-expected economic data,” Potapov said.
“While the Federal Reserve is still expected to cut interest rates later this year and with fundamental demand remaining strong, builders are optimistic for the future. However, the significant boost in home sales activity typical for the spring home-buying season may be delayed later into the summer.”
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