New-home sales heated up to a seven-month high in February at 592,000, a 6.1 percent increase, according to the U.S. Census Bureau and the Department of Housing and Urban Development (HUD). The average new-home sales price was $390,400, while the median was $296,200. New-home listing inventory was 266,000—5.4 months supply.
New-home sales sizzled compared to a tepid January, when activity was stifled by limited new supply.
“This growth was likely spurred by several factors, including a warm winter that allowed builders to stick to construction schedules, last year’s strong home construction starts, and a gradual shift from building apartments to individual homes,” says Joseph Kirchner, senior economist at realtor.com®.
“While this growth is encouraging, it’s important for house hunters to keep in mind that builders have been focusing on the more pricey part of the market; affordable options are still in short supply. That’s a key reason why existing-home sales dropped in February while sales of new homes went up—existing home sales include both affordable and premium homes. During that month, sales of existing homes under $100,000 plummeted 15 percent and sales of homes in the $100,000 to $250,000 range fell 2 percent, while sales of more expensive existing homes soared.”
Source: U.S. Census Bureau