Steel Markets
January New Home Sales Slip
Written by David Schollaert
February 25, 2022
Sales of new single-family homes fell in January following a sharp upwardly revised reading the month prior. Last month’s 4.5% decline in new homes sales resulted from rising interest rates. The seasonally adjusted rate of 801,000 was steady because demand remains strong, the U.S. Department of Housing and Urban Development and the U.S. Census Bureau reported.
“Demand is strong given a lack of existing home inventory,” NAHB Chairman Jerry Konter said. “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.”
The median sales price of new houses sold in January 2022 was $423,300, up 7.0% from $395,500 in December, and up more than 13% from a year ago. The increase was due primarily to higher development costs, including for materials.
“New home prices continue to rise as the cost of materials increases,” NAHB Chief Economist Robert Dietz said. “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.”
The inventory of new houses for sale at the end of January was an estimated 406,000, 34.4% above the same year ago period – a 6.1-month supply at the current sales rate. Just 37,000 of those homes, however, are completed and ready to occupy.
Regionally, on a year-to-date basis, new home sales rose in three out of the four 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.
By David Schollaert, David@SteelMarketUpdate.com
David Schollaert
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