April 23, 2014

New-home sales decrease 14.5% in March

April 24, 2014 – New-home sales decreased by 14.5 percent from 459,000 annualized units in February to 384,000 annualized units in March, noted NAFCU Research Assistant Doug Christman in a NAFCU Macro Data Flash report.

This is a 13.3 percent decrease from a year ago, Christman said, analyzing data from the Census Bureau.

"Increasing home prices, rising mortgage rates and tight credit standards continue to inhibit demand," Christman said. "Housing starts have also been restrained in recent months, causing concerns about overall housing investment in 2014."

Only one of the four regions showed sales increase for the month. Monthly sales in the Northeast region rose 12.5 percent. Sales in the Midwest fell by 21.5 percent, followed by the West (-16.7 percent) and South (-14.4 percent).

There were six months of available inventory in March, up from the revised five months of supply in February. The number of unsold homes left on the market rose to 193,000 units. The number of unsold homes is up 42.9 percent from a year ago.

The median new-home price, non-seasonally adjusted, increased from $260,900 in February to $290,000 in March; up from $257,500 a year ago.

"Improvements in the labor market and loosening credit standards are expected to help the housing market improve later in the year," Christman said.