According to a recent report from the US Commerce Department, new home sales in the country declined unexpectedly in February. The report states that new home sales slightly fell by 0.3 percent to an annual rate of 662,000 for the month, after having surged by 1.7 percent to a revised rate of 664,000 in January. This comes as a surprise to economists who had projected an increase in sales by 2.9 percent, to a rate of 680,000 from January's initially reported 661,000.
Despite the slight drop on a month to month basis, new home sales recorded a 5.9 percent increase in February compared to the same month in the previous year. The unexpected monthly decline could be attributed in part to a significant decrease in new home sales in the North, with a 31.5 percent fall to a rate of 37,000 in February from the previous month's 54,000.
In the Midwest, new home sales also fell, recording a 2.4 percent slump to a rate of 83,000. However, new home sales in the West and South saw improvements, with increases of 2.3 percent (to a rate of 175,000) and 3.7 percent (to a rate of 367,000) respectively.
The median sales price of new houses sold in February was reported to be $400,500, which marked a 3.5 percent drop from January's $414,900 and a 7.6 percent decrease from the $433,300 recorded a year before.
By the end of February, it was estimated that there were 463,000 new houses on sale, which equates to an 8.4 month supply at the current sales pace. This is a slight increase from January's 8.3 months of supply, but mirrors the situation in February of the previous year.
Separately, the National Association of Realtors reported that existing home sales in the country continued to rise unexpectedly in February. The index for existing home sales spiked by 9.5 percent to an annual rate of 4.38 million, following a 3.1 percent increase to a rate of 4.00 million in January. This spike was unexpected, as economists had anticipated a 1.5 percent decrease to a rate of 3.94 million. With this unexpected boost, existing home sales registered their highest level since the annual rate of 4.530 million recorded in February 2023.
