Steel Markets

New Home Sales Edged Higher in January: NAHB

Written by David Schollaert

February 26, 2023

New, single‐family home sales rebounded slightly in January in response to declining mortgage rates and home prices in December, according to a joint report from the US Department of Housing and Urban Development and the US Census Bureau.

The result was helped by home builders’ use of sales incentives, which boosted new home sales, the report said.

Sales of newly constructed single-family homes rose 7.2% month-on-month (MoM) in January to a 670,000 seasonally adjusted annual rate.

“The latest HMI survey shows 57% of builders are using incentives to bolster sales, including providing mortgage rate buy-downs, paying points for buyers and offering price reductions,” said NAHB chairman Alicia Huey. “Buyer incentives, along with stabilizing mortgage rates during the month of January, increased the pace of new home sales for the month,”

Huey is also and a custom home builder and developer in Birmingham, Ala.

Despite the gain, sales remain down 19.4% compared to a year ago, a reflection of current market weakness, Huey said.

The median price for a new home declined for a third straight month after peaking at $296,800 in October. The average sales price was $427,500 last month, down 8.2% from December.

“Even though new home sales edged higher in January, the recent uptick in mortgage rates would imply continued weakness in the coming months,” said Danushka Nanayakkara-Skillington, NAHB’s assistant vice president for forecasting and analysis. “In terms of affordability, the median price is down for the third straight month and is down compared to a year ago.”

By David Schollaert, david@steelmarketupdate.com

David Schollaert

David Schollaert is deputy editor-in-chief for Steel Market Update. David joined SMU after more than a decade in the metals and mining industry in a myriad of different roles. Much of his early experience and expertise were within the coverage and analysis of steel-making raw materials and served previously as senior editor of the CRU Prices Service. Most recently, however, before his return to market analysis, David held roles as a metals buyer and an operations manager for raw material suppliers. He can be contacted at david@steelmarketupdate.com or 724-720-1008.

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