The Gaetano Group
Selling Mountains, Coast, Town & Country
National Home Sales Data
- Contracts for new home sales slipped 3.3% from January to February to a seasonally adjusted annualized rate of 440,000. This decline reverses last month’s improvement, but new home sales remain in a relatively strong level by recent standards. A decline in affordability nationally and weather in the Northeast and parts of the Southeast have had an impact.
- Inventories improved steadily throughout 2013 and were 24.3% from a year ago in February and increased a modest 0.5% between January and February. However, the months supply is still 5.2 suggesting an imbalance that favors price growth.
- Low inventories combined with low mortgage rates pressed up on the median sale price in 2013. The median price for a new home under contract eased a modest 1.1% over the 12-month period ending in February to $261,800. The median existing home price was 38.4% lower at $189,200, more than three times the historical average spread of a 12.3%, suggesting that existing homes are a bargain by historical standards.
- Mortgage rate and price increases in 2013 had a strong impact on affordability. However, new home sales remain roughly where they were last spring when mortgage rates were a full percentage point lower and prices were lower by 10% or more. Weather has constrained new production to an extent, but that will abate resulting in more inventory coming on line in six to nine months. Rates will continue to rise through the year, so a sustainable increase in inventory that resulted in a moderate waning in price growth would provide a welcome relief.
- Last week, NAR released a summary of existing home sales data showing that existing home sales declined again for the sixth time in seven months. February showed a decrease in sales of 0.4% from last month and 7.1% from a year ago.
- The national median existing-home price for all housing types was $189,000 in February, up 9.1% percent from February 2013.
- All regions showed growth in prices, but the West had the biggest gain at 18% from a year ago. The Northeast had the smallest price gain at 1.5% from a year ago.
- February’s inventory figures increased by 5.3% from a year ago and it will take 5.2 months to move the current level of inventory. It marks the highest inventory level since April 2013. As the charting of months’ supply below shows, the condominium market tends to be undergoing larger swings than the single-family market.
- With sales down this month, February has the slowest sales pace since July 2012. Change in seasons and a boost in inventory will help change the current sales trend even with rates on the rise. A boost in household formation will help improve the housing market. See the full NAR Existing Home Sales press release here and data tables here.
- Find a full graphical summary of the data here.
LATEST MONTHLY EHS INFOGRAPHIC
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