New Home Inventory Largest in 9 Years

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MORTGAGE EXPERT
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Even though there was little change in national new home sales, sales sank in the West and soared in the Northeast. The inventory of new homes for sale reached a 9-year high.

On a preliminary basis,
the sale of 51,000 new single-family homes were completed during February. Including prior-month sales, there have been 98,000 new home sold this year.

Making adjustments for seasonal factors, the annual rate of new home sales worked out to 618,000 last month, off less than a percent from the upwardly revised level for January.

The data was jointly released Friday by the Census Bureau and the Department of Housing and Urban Development.

The annual rate crept up less than a percent from the upwardly revised number for February 2017.

LendingTree Chief Economist
Tendayi Kapfidze said in a statement that sales were in line with market expectations.

“New home sales are amongst the most volatile and revision prone economic data series,” Kapfidze said. “At LendingTree we prefer to look through some of this by considering the three-month average to balance timeliness with information value. The three-month average of 631,000 is at the fourth highest level since the financial crisis.”

New home sales in the West came in an a seasonally adjusted annual rate of 164,000, sinking from January by 18 percent — the worst of any region. Sales in the Midwest fell 4 percent to 79,000.

But the rate in the South increased 9 percent to a seasonally adjusted annual rate of 338,000, while the Northeast’s rate soared 19 percent to 37,000.

As of Feb. 28, there were a seasonally adjusted 305,000 new U.S. homes for sale —
the most since March 2009 when the number was 311,000.

At the current rate of sales, the supply worked out to 5.9 months.

The median sales price in February 2018 was $326,800, while the average price was $376,700.

“The recent upward revisions to the sales numbers reflect our forecast for a gradual strengthening of the single-family housing sector in 2018,” National Association of Home Builders Chief Economist Robert Dietz said in the report. “Demographic tailwinds point to higher demand for single-family homes in the months ahead. Combined with solid job market data, we expect more consumers to enter the housing market this year.”

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Mortgage Daily Staff

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