New Home Sales Slow in February

“However, the February sales rate was 8% higher than a year ago, as housing demand continues to be supported by relatively low interest rates, a continued consumer focus on the importance of housing, and solid demand in lower-density markets like suburbs and exurbs.”

The median price for a new home in February was $349,000 and the average selling price was $416,000.

“Housing affordability headwinds are rising for 2021 due to supply-side challenges such as elevated lumber costs and prospects for increased regulatory burdens associated with land development and building,” said Dietz. “Price discipline will be key for 2021 volume growth, given rising material costs.”

For sale inventory at the end of February stood at a seasonally adjusted estimate of 312,000 units, a 4.8-month supply at the current sales rate. The inventory estimate includes houses for sale but not started, those under construction and homes that have been completed. Only 42,000 homes were finished and ready for occupancy at the end of February.