New US Home Sales Slip, Prices Fall Amid Signs Of Normalization
New home sales unexpectedly fell last month, the first of this week's notable data out of the world's largest economy showed.
The 662,000 annual rate was well short of the 677,000 consensus. The prior four months were revised slightly higher.
February's pace marked a 0.3% decline versus the 2.3% gain economists expected. It was the first monthly drop since November.
This is a government release. And, as a reminder, it's volatile.
For the better part of two years, new construction was the o
Prices probably won’t crater, but on average around the country, I expect housing prices to lag nominal GDP- perhaps even inflation. This will be a relief for home buyers eventually. If/when the FOMC eventually starts cutting rates there will be more relief for buyers with more inventory to choose from. Nationally inventory is still tight, but over the next few years that will probably normalize as well.
New houses are getting smaller, peak in mid 2010s was 2450 sf, pre-pandemic was 2300 sf, now 2180 sf. They are also getting more stripped down, lots smaller, etc as builders try to cut costs.
Price/sf has thus declined less than price.
Of course, the reported median price doesn’t include rate buydown.