Sales of new US single-family homes fell in January, suggesting the housing market weakness persisted early in Q-1.
December’s sales pace was revised higher to 652,000 units from the previously reported 621,000 units.
Economists polled had forecast new home sales, which account for about 11% of housing market sales, slipping 0.6% to a pace of 620,000 units in January.
New home sales are drawn from permits and tend to be volatile on a month-to-month basis. They fell 4.1% from a year ago. Affordability remains a challenge, especially at the lower end of the market, even as mortgage rates have dropped from last year’s highs and house price inflation has slowed.
Economists expect the housing market, which hit a soft patch last year, to remain sluggish through 1-H of Y 2019. Investment in homebuilding contracted 0.2% in Y 2018, the weakest performance since Y 2010.
The release of the January new home sales report was delayed by a 35-day partial shutdown of the federal government that ended on 25 January, February’s new home sales report, which was scheduled for release on 25 March, will now be published on 29 March.
The median new house price fell 3.8% to $317,200 in January from a year ago. There were 336,000 new homes on the market in January, down 1.5% from December. Supply is just over 50% of what it was at the peak of the housing market boom in Y 2006.
At January’s sales pace it would take 6.6 months to clear the supply of houses on the market, up from 6.3 months in December. Just under 67% of the houses sold last month were either under construction or yet to be built.
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