The February pace of new home sales was up 2% nationwide, according to estimates published by the Census Bureau and the Department of Housing and Urban Development. At a seasonally adjusted annual rate of 512,000, the February rate posted a slight improvement over the upwardly revised January estimate, which increased from a 494,000 annual rate to 502,000.
Since 2011, new home sales have been on a gradual, increasing trend as the industry rebuilds its infrastructure. The most common supply-side headwinds (lots, labor, and lending) act as a constraint on how fast builder inventory can increase, despite flat conditions for existing home inventory and an improving environment for housing demand.
As of February, the Census Bureau estimates that there were 240,000 new homes available for sale on a seasonally adjusted basis, a 5.6 months’ supply. The count of completed, ready-to-occupy inventory stood at just 53,000 homes, effectively flat on a year-over-year basis. The count of new homes for sale that are under construction rose from 113,000 in February of 2015 to 144,000 in the current report.
The median price of new homes sold in February was $301,400. The average price, $348,900, has tracked down after reaching $376,800 in November.
The regional numbers in the February report reveal seemingly significant declines for the Northeast (-24%), Midwest (-18%), and the South (-4%) and a notable jump in the West (39%). However, on a three-month moving average basis, the regional numbers have exhibited little change since December. Take the quarterly perspective on the regional numbers in today’s report.