Sales of new single-family homes in the U.S. fell 18.2% between January and February on a seasonally adjusted basis to an annual rate of 775,000, the U.S. Census Bureau and the Department of Housing and Urban Development reported. Year over year, sales were 8.2% higher than February 2020.
The median sales price for new houses sold in February was $349,000.
Much of the year-over-year increase in home sales was supported by continued robust activity in the Southeast, which saw a 20.2% rise to a 458,000 annual rate. The Midwest was the only other region to see year-over-year gains in sales, with growth of 4.9% to an 85,000 rate, while the Northeast and West saw declines of 11.6% and 8.1% to 38,000 and 194,000, respectively.
On a monthly basis, sales were down in all regions, led by the Midwest, where sales plunged 37.5%, and followed by the West, South and Northeast with declines of 16.4%, 14.7% and 11.6%, respectively.
The National Association of Homebuilders chalked up the month-over-month decline in sales to a “combination of broader affordability challenges,” including higher interest rates and rising materials, and the effects of winter storms, which hampered activity.
Nevertheless, housing demand remains strong, as seen in the year-over-year numbers, the association said in a release, highlighting relatively low interest rates, a continued consumer focus on the importance of housing and solid demand in suburbs and exurbs.
NAHB cautioned that housing affordability headwinds will increase in 2021, thanks to the increasing cost of building materials and rising mortgage rates, which have risen more than 30 basis points over the last five weeks per Freddie Mac estimates.
At the end of February, there were 312,000 homes for sale nationwide, a 2.6% increase from January and a 4.6% decline from February 2020. This represented a 4.8-month supply, which was up 26.3% from the 3.8-month supply in January but down 12.7% from a year ago.