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New homes sales rise again in February
New home sales increased 1.1 percent in February to 640,000 annualized units, while sales in January were revised down 37,000 units. Compared to last year, February sales were down 10 percent. NAFCU Chief Economist and Vice President of Research Curt Long analyzed the data in the latest Macro Data Flash report.
“New home sales grew modestly in February, remaining on a steady upward path since last summer,” said Long. “That is a stark contrast with the existing homes market, which ended a 12-month string of sales declines last month."
Based on current month sales, there were 8.2 months of supply in February – a 0.1-month decrease from January. The number of unsold homes left on the market decreased by 3,000 homes to 436,000, representing a 10.1 percent increase from inventory levels a year ago.
New home sales were mixed in the census regions in February with the West seeing the largest increase (+8.1 percent) followed by the South (+3 percent). Sales declined in the Northeast (-40 percent) and Midwest (-1.4 percent).
“While existing home inventory remains extremely tight, the supply of new homes is strong and improving,” added Long. “Although the number of total new homes for sale is down 5 percent over the past six months, the number of completed homes for sale is up by 57 percent during that time as construction supply chains heal."
Of note, the median new home price, non-seasonally adjusted, increased 2.7 percent in February to $438,000, amounting to 2.5 percent higher than a year earlier.
“Homebuilder sentiment has increased in each of the first three months of 2023 after declining every month in 2022. NAFCU believes the housing market has bottomed out and expects a modest recovery over the remainder of 2023,” concluded Long.
For more economic updates from NAFCU's award-winning research team, view all of NAFCU's Macro Data Flash reports.