The pace of new US home sales was slightly slower than expected last month, data released on Thursday suggested.
At 640,000, the annual rate trailed the 650,000 consensus, but not by enough to matter. The print was basically in line.
More notable, perhaps, was the downward revision to January’s headline, which now shows a 633,000 pace compared to the originally reported 670,000 rate.
Figures for both December and November were adjusted slightly lower. Following the revisions, January’s MoM increase is now a very pedestrian 1.8%. Taken with February’s less-than-ebullient pace, the MoM gains are minuscule as the spring buying season approaches.
At this point, “indeterminate” is about the best adjective I can conjure. Sales in the northeast plummeted, the south held up and sales rose out west. Technically, the market expected overall sales to fall in February, but that didn’t take account of the downward revision to January, so the below-consensus headline actually counted as an “unexpected” increase.
New home sales are in theory getting support from a dearth of “used” inventory, but between the downward revision to January’s headline, the “meh” February print and the fact that this series isn’t especially reliable in the first place, it’s hard to make much of the numbers.
The data follows NAR figures which showed sales of existing homes rose dramatically in February, consistent with an increase in pending home sales the prior two months. Prices for existing homes in the US are falling on a YoY basis for the first time in 131 months.
Recall that the median new home price fell in January, but an uptick in February (to $438,200 from $426,500) marked a resumption of YoY gains.
Prices are still some 12% off the peaks seen late last year. The average new home price remained below $500,000, albeit just barely.
Months’ supply stood at 8.2 last month, compared to 8.3 in January. As a reminder, the low was 3.3 in August of 2020.
The MBA on Wednesday said mortgage applications rose 3% over the last week, as rates fell to the lowest in a month. “However, mortgage rates have not dropped as much as Treasury rates due to increased MBS market volatility,” MBA VP and deputy chief economist Joel Kan remarked, adding that at 300bps, the spread between the 30-year fixed and 10-year Treasurys is pretty wide.
Separately, Redfin on Wednesday said a typical US homebuyer put just $42,000 down in January, the least in two years. Americans are now back to making 10% down payments, but in a testament to how expensive homes still are, the $42,000 was still 30% above pre-COVID levels+.
