Consumers signed contracts to purchase new homes at an annual rate of 494,000 in January. The monthly number is 9.2% below the December level but the December report was higher than expected. The two month average is 519,000, which is more in line with expectations and trend. Two regions increased and two declined with the West falling 32.1% to 110,000. Similar to the national level, the two month average in the West was 132,000 which compares to the past 6 months average of 127,500.
The inventory of new homes for sale continued to increase to 238,000, the highest since October 2009. The steady increase in inventory supports builders’ expectations for continued modest increases in new sales. The month’s supply increased to 5.8 months due to the fall in sales.
The median sales price dropped 4.5% to $278,800 due to an increase in sales of homes between $150,000 and $199,999. Increases in relatively affordable homes is a sign that the first time buyer is finally creeping back into the home buying market.