New home sales declined 2% in February to an adjusted annual rate of 772,000, the U.S. Census Bureau reported. Compared with February 2021, the rate fell 6.2%.
Regionally, compared with January, new home sales grew 59.3% in the Northeast and 6.3% in the Midwest. New home sales declined 13.0% and 1.7% in the West and South, respectively.
“Higher construction costs are hindering new home sales as the cost of lumber, OSB, shingles and other materials rise,” stated Jerry Konter, chairman of the National Association of Home Builders. “Policymakers could help by reducing tariffs on materials as an anti-inflation measure.”
The median sales price of new houses sold in February was $400,600, with an average sales price of $511,000.
The seasonally adjusted estimate of new homes for sale at the end of February was 407,000, a 6.3-month supply at the current sales pace.
“New home sales softened in January and February as mortgage rates increased,” added NAHB Chief Economist Robert Dietz. “NAHB is forecasting additional gains in interest rates as monetary policy meaningfully tightens in 2022, putting additional pressure on housing affordability. However, because there is such limited inventory of existing single-family homes on the market, additional new construction is required to meet demand even as building costs significantly outpace inflation.”
The full report can be found here.
