New home sales in the Northeast led a national month-over-month decrease last month. While opinions vary on why sales were down, the outlook is optimistic. The supply of new homes for sales was the greatest since 2014.
The sale of new single-family houses numbered a preliminary 44,000 during all of January. That turned out to be the fewest units sold since there were 38,000 in December 2016.
Last month’s new U.S. home sales worked out to
a seasonally adjusted annual rate of 593,000, tumbling from an upwardly revised 643,000 in December 2017.
Volume was also off from an upwardly revised 599,000 in January 2017.
The Census Bureau and Department of Housing and Urban Development jointly reported the data Monday.
LendingTree Chief Economist Tendayi Kapfidze noted in a posting that new home sales data are the most revision-prone economic data.
“At LendingTree we prefer to look through some of this by considering the 3-month average to balance timeliness with information value,” Kapfidze said. “The 3-month average of 644,000 is at the third highest level since the financial crisis.”
At the National Association of Home Builders, the group’s senior economist, Michael Neal, had his own take on the slowdown.
“The moderation in new home sales may be attributable to the interest rate environment, which could be causing short-term market volatility,” Neal said in a written statement. “However, the underlying economic fundamentals for housing demand remain strong and we expect more prospective home buyers to enter the market in 2018.”
New home sales sank by a third in the Northeast — the most of any region — to a seasonally adjusted annual rate of 24,000.
“States in the Northeast such as New Jersey, New York and Connecticut are among the most vulnerable to the new tax law,” LendingTree’s Kapfidze explained.
A 14 percent drop in the South left the rate there at 301,000.
In the West, the seasonally adjusted annual rate of new home sales was 193,000 during January 2018, up a percent from the previous month. Sales soared 15 percent in the Midwest to 75,000.
The seasonally adjusted 301,000 U.S. housing units for sale as of Jan. 31, 2018, worked out to a 6.1 month supply — the longest supply since it was 6.2 months in July 2014.
Average sales prices were $382,700 during th first month of this year, and the median price was $323,000.
