The pace of brand new single-family home sales increased for the second consecutive month in January.
The 4.3 percent jump to 923,000 from December’s revised rate of 885,000 also represented a 19.3 percent year-over-year increase, according to the Census Bureau’s monthly report on new residential construction.
The report tracks single-family home sales by contracts signed or deposits paid for a sample of homes selected from building permits. The Census Bureau notes that it is a volatile, month-over-month metric, and that it takes about four months to establish a trend.
In the Midwest and South, new homes sales followed the national trend, with increases year-over-year and month-over-month. But some regional sales trends differed. The rate of sales last month in the Northeast fell 13.9 percent from December and was down 8.8 percent compared with January 2020.
The West also reported a lower number of sales compared to a year earlier, down 6.3 percent from January 2020. The region did see a 6.8 percent increase from December to January.
At the end of January, an estimated 307,000 new homes were for sale, or a four-month supply based on the month’s rate of sales. That represents a 2.7 percent increase in new housing inventory from December’s revised figure of 299,000 homes on the market.
Compared to a year ago, however, the number of new homes for sale has dropped 5.5 percent.
Homebuilder confidence is high: Plans to construct new building permits surged last month, but construction costs are elevated and still rising, and the number of housing starts fell in January. Lumber prices hit record highs this month, leading some builders to delay projects or tack the additional costs onto the home price, Reuters reports.
The unprecedented low number of homes available for purchase has led buyers to bid up prices, which climbed 10.4 percent in December.
In July the median home price surpassed $300,000 for the first time, and for new single-family homes the median price in January was $346,400, up 5.3 percent from a year earlier. A recent report by Fitch Ratings warned that U.S. homes prices were more than 5 percent higher in November than were justified by economic conditions.