New Home Sales Improved YOY But Fell Short Of Expectations

New home sales improved YOY in January despite elevated rates and higher prices, though didn’t hit the mark on analysts’ expectations.

That’s according to data from the U.S. Census Bureau and the Department of Housing and Urban Development, which reported sales up by 1.5% from December to a seasonally adjusted annual rate of 661,000, a jump from the month priors’ revised rate of 651,000.

New home sales were up 1.8% from the same time last year.

While the report is good news, the numbers fell short of experts’ predictions. A survey of economists by Bloomberg predicted a rate of 684,000.

There were 456,000 new homes for sale at the end of the month. This represents an 8.3-month supply at the current sales rate, an improvement.

Both the median and average sales price of new houses sold in January were up from December, to $420,700 and $534,300, respectively. They did cool over the course of the year, however.

Stock shortages continued in January, but homebuilders have been busily working to fill gaps in the market.

Existing home sales remained depressed YOY in January, though they did see an uptick month-over-month. Rate-locked homeowners are reluctant to sell, making new construction an ideal solution for desperate buyers.

Overall, January housing data suggests 2024 started off well, if not as strong as some hoped.

“While home sales remain sizably lower than a couple of years ago, January’s monthly gain is the start of more supply and demand,” NAR Chief Economist Lawrence Yun said regarding existing home sales data.

“Listings were modestly higher, and home buyers are taking advantage of lower mortgage rates compared to late last year.”