New single family home sales increased 4.3% to a seasonally adjusted rate of 923,000 in January, the U.S. Census Bureau reports. The rate grew 19.3% compared with January 2020.
The National Association of Home Builders attributed the growth to low mortgage rates and an increase in demand.
Top concerns for builders right now continue to be supplies and inventory. Inventory for new homes was at a four-month supply at the current sales pace, a 6.3% drop compared with January 2020.
“Rising building and development costs, combined with recent increases in mortgage interest rates, threaten to exacerbate existing affordability conditions,” NAHB Chief Economist Robert Dietz stated. “Builders are exercising discipline to ensure home prices do not outpace buyer budgets."
The median sales price was $346,400, a 5.3% increase compared with January 2020.
Regionally, new home sales fell 13.9% in the Northeast, but rose 12.6% in the Midwest, 3% in the South and 6.8% in the West.
