In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s update discusses new home sales.
- The figures for new home sales, contracts and not actual closings, were very positive today.
- New home sales in January jumped 15.6% from an upwardly revised December figure of 378,000 (vs. 369,000 initial estimate).
- Relative to last year, new home sales in January were 28.9% stronger, but the median price was only 2.1% higher. The median home price for new construction in January remained 30% higher than the median price of existing home sales.
- While construction has ramped up in recent quarters, inventories continued to edge lower reaching 4.1 months in January. That is the 12th consecutive month below a supply of 5 months and the lowest since March of 2005.
- Continued growth of new sales will help to stimulate new construction which is good for the economy and employment. However, only so many new homes can be sold as long as inventories remain tight and construction lags to keep up with demand.