Builders in the US signed contracts on more homes last month than any time since early 2008, according to figures released by the Census Bureau and HUD. February seasonally adjusted annual new home sales topped out at a 539,000 annual pace, up 7.8 per cent from a healthy 500,000 rate in January. In percentage terms, sales increased the most in the Northeast, 153 per cent over the January rate, due to prior weather-related declines. Inventories dropped slightly to 210,000, which with the increased sales rate, lowered the months’ supply measure to 4.7 months. Lower inventories suggests optimism about construction growth for the year ahead.
Although reporting smaller gains, existing home sales shook off winter-related declines in February as well. As reported by the National Association of Realtors, sales increased 1.2 per cent in February, up 4.7 per cent from a year earlier, and the share of sales for first-time buyers registered its first gain since last November. Supplies of existing homes for sale are also diminished, with the current inventory representing only a 4.6-month supply.
Home Sales, Prices, US
The NAHB/Wells Housing Market Index (HMI) fell two points to 53 in March. The drop marked the third consecutive decrease in this measure of single-family builder confidence. However, the HMI has been above 50 since July of last year, suggesting that the outlook for construction growth is good, not great.
Sales of newly built single-family homes increased 7.8 oer cent from a month earlier to a seasonally adjusted annual rate of 539,000, the US Commerce Department said Tuesday. That is the highest level since February 2008.
At David Weekley Homes, a closely held builder operating in 11 states, sales orders in February and March are up 5 to 10 per cent from the same period last year. Chief Executive John Johnson said, “There’s evidence that buyers who had been forestalling or delaying their decision are now comfortable enough to buy. And there’s some awareness that interest rates aren’t going to stay down forever.”
As well, the US Census Bureau said this week, “The median sales price of new houses sold in February 2015 was US$275,500; the average sales price was US$341,000.”
Less than 5 per cent of homes sold were under US$150,000 in February 2015. This is down from 30 per cent in 2002 — and down from 20 per cent as recently as August 2011.
However there has been a pickup in homes sold in the US$200,000 to US$300,000 range, which increased to 37.8 per cent of homes in February 2015.