Steel Markets

New Home Sales at 5 Month Low in February

March 25, 2014

Sales of new single-family homes dropped in February to a seasonally adjusted annual rate of 440,000 according to estimates by the Commerce Department. Sales were 3.3 percent below the revised January rate of 455,000 and 1.1 percent below the February 2013 estimate of 445,000.

Sales on a three month moving average were 445,000, up slightly from 433,000 in the same three months in 2013.

In the most recent survey by the National Association of Home Builders (NAHB), builder confidence rose by only one point. A shortage of buildable lots and difficulty finding skilled labor has builders worried about meeting spring demand. However, although sales normally pick up in spring, so far demand has been down, as indicated by decreased mortgage applications in February.

The median sales price of new homes in February was $261,800 and the average sale price was $317,500.

Inventory increased in February to a seasonally adjusted estimate of 189,000, up from 184,000 at the end of January and 171,000 at the end of December. The February inventory represents a supply of 5.2 months at the current sales rate. A supply of six months is considered a healthy balance for supply and demand in the housing market.

New home sales fell in all regions except the Midwest which rose 35.7 percent from a revised 49,000 in January to 67,000 in February. Sales in the Northeast dropped 32.4 percent, the West fell 15.9 percent and the South edged down 1.5 percent.

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{amchart id=”98″ Residential Housing Statistics (Starts/Permits/Sales)}