Washington, D.C.—Sales of newly built single-family homes in January fell 4.5% to an 801,000 seasonally adjusted annual rate from a sharp upwardly revised reading in December, according to the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.
“Demand is strong given a lack of existing home inventory,” said Jerry Konter, NAHB chairman. “Builders are grappling with supply chain issues that are extending construction times and increasing costs. Policymakers need to focus on alleviating production bottlenecks, particularly as it relates to lumber and other building materials.”
NAHB chief economist, Robert Dietz, added, “New home prices continue to rise as the cost of materials increases. Higher mortgage rates will slow home buying demand over the course of 2022 and the Russia-Ukraine crisis will add short-term volatility to the bond market.”
A new home sale occurs when a sales contract is signed or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the January reading of 801,000 units is the number of homes that would sell if this pace continued for the next 12 months.
New single-family home inventory was up 34.4% over last year, rising to a 6.1 months’ supply, with 406,000 available for sale, according to the National Home Builders Association (NAHB). However, just 37,000 of those are completed and ready to occupy.
The median sales price rose to $423,300 in January from $395,500 in December and is up more than 13% compared to a year ago, due primarily to higher development costs, including materials, according to the NAHB.
Regionally, on a year-to-date basis, new home sales fell in three regions, down 10.7% in the Northeast, 3.7% in the Midwest and 7.4% in the South. New home sales were up 1.2% in the West.