Steel Markets

Single-Family Home Sales Drop in January

March 14, 2019

Sales of new single-family homes slowed in January following upward revisions of data for the previous two months. Sales dipped 6.9 percent from December to a seasonally adjusted annual rate of 607,000, said Commerce in a delayed report. The January rate fell 4.1 percent from the year-ago estimate of 633,000.

“Combined with lower mortgage interest rates, the first monthly rate for 2019 establishes a solid foundation on which to build heading into higher volume sales months,” commented National Association of Home Builders Chief Economist Robert Dietz.

“After the data revisions, new home sales ended 2018 up 2.3 percent at 627,000, compared to the 613,000 total for 2017,” said Dietz. “Despite a decline in available new home inventory, the month’s supply number remains somewhat elevated at 6.6. The current rate of sales remains off the post-Great Recession trend due to housing affordability concerns made worse by the late 2018 rise in mortgage interest rates. Mortgage rates have declined in 2019, which in turn should lead to additional new home demand. Builder confidence has also stabilized in recent months.”

The median sales price of a new home was $317,200 and the average price $373,100. Estimated inventory at the end of January was 336,000, a supply of 6.6 months at the current sales rate.

Dietz noted that in January, 66 percent of homes were priced between $200,000 and $400,000 compared to 22 percent in the $400,000 to $750,000 range.

“These numbers indicate that builders who can produce housing at affordable price points in markets across the nation will be able to meet this sales demand that is generated by healthy household formations and solid job and wage growth,” said Dietz.

Regionally, sales compared to December fell by double digits everywhere but the West, which posted a gain of 27.8 percent. Sales dropped 11.4 percent in the Northeast, 26.8 percent in the Midwest and 15.1 percent in the South.