US February New Home Sales Dip to 662K, Below Expectations

In February, the United States experienced an unexpected decline in new single-family home sales, with a seasonally adjusted annual rate of 662,000 units, which was a 0.3% decrease from January's revised rate of 665,000 units. The February figure fell short of economists' predictions, which had anticipated an increase to around 675,000 units. Despite this slight drop, the housing market has been showing signs of resilience, attributed in part to a shortage of existing homes for sale.

The median sales price for new homes in February was $400,500, with an average price of $485,000. At the end of the month, there was an inventory of 463,000 new homes for sale, which corresponds to a supply of 8.4 months at the current sales rate. This level of supply is considered to be above the normal range.

The housing market has been grappling with higher mortgage rates, which have contributed to fluctuating demand and sales. Builders have been responding to these market conditions by adjusting strategies, including reducing the square footage of new homes to make them more affordable. Despite the unexpected decrease in February, there is growth expected in the pipeline, as the market continues to adapt to the changing economic landscape.