New Home Sales Rise in January03-04-24 | Economic News

New Home Sales Rise in January

Steady Growth Despite Elevated Inventory Levels and Affordability Concerns
by Staff

January sees a 1.5% increase in new home sales, buoyed by stable mortgage rates.

Newly released data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau reveals a 1.5% increase in new home sales in January, reflecting a seasonally adjusted annual rate of 661,000 units. As reported by the National Association of Home Builders (NAHB), this uptick is supported by stable mortgage rates at the beginning of 2024 and marks a 1.8% increase from the same period last year.

"While we're encouraged by the growth in new home sales, challenges persist, particularly in terms of inventory levels and affordability," noted the NAHB. "Elevated inventory levels and a declining share of entry-level homes priced below $300,000 underscore the need for policies that support affordable housing."
The report highlights that new single-family home inventory remained elevated in January, with 456,000 units available, representing an 8.3 months' supply at the current building pace. Completed inventory increased by 19.4% compared to a year ago, reaching 86,000 units by the end of January.
However, according the NAHB, affordability concerns persist, with only 15% of homes priced below $300,000, while 34% were priced above $500,000. The majority of homes fell within the $300,000-$500,000 price range.
Regionally, new home sales varied, with notable increases of 4.9% in the Northeast and 57.0% in the West on a year-over-year basis. However, sales declined by 4.1% in the Midwest and 13.5% in the South, highlighting regional disparities in the housing market's performance.