New home sales hold steady

WASHINGTON — A small rise in mortgage rates in February led to a flat reading for new home sales, according to the National Association of Home Builders.

The NAHB, citing newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, said that sales of newly built, single-family homes in February edged 0.3% lower to a 662,000 seasonally adjusted annual rate. The pace of new home sales in February is up 5.9% from a year earlier.

“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 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.”

“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.”

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

A new home sale occurs when a sales contract is signed, or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the February reading of 662,000 units is the number of homes that would sell if this pace continued for the next 12 months.

New single-family home inventory in February remained elevated at a level of 463,000, up 1.3% from January. This represents an 8.4 months’ supply at the current building pace. A measure near a 6 months’ supply is considered balanced. However, with only a 2.9 months’ supply of existing homes for sale, new home inventory can remain above this balanced measure.

The median new home sale price in February was $400,500, edging down 3.5% from January, and down 7.6% compared to a year ago.

Regionally, on a year-to-date basis, new home sales are up 47.0% in the Northeast, 29.7% in the Midwest and 41.0% in the West. New home sales are down 13.4% in the South.


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Larry Adams is a Chicago-based writer and editor who writes about how things get done. A former wire service and community newspaper reporter, Larry is an award-winning writer with more than three decades of experience. In addition to writing about woodworking, he has covered science, metrology, metalworking, industrial design, quality control, imaging, Swiss and micromanufacturing . He was previously a Tabbie Award winner for his coverage of nano-based coatings technology for the automotive industry. Larry volunteers for the historic preservation group, the Kalo Foundation/Ianelli Studios, and the science-based group, Chicago Council on Science and Technology (C2ST).