Charts: New Homes Sales on the Rise Again
The U.S. Department of Housing & Urban Development (HUD) and the Census Bureau estimate sales of new single‐family houses in March 2019 were at a seasonally adjusted annual rate of 692,000. This represents a 4.5 percent increase over the revised February rate of 662,000 and a 3 percent increase over March 2018. For the first quarter of 2019, new homes sales are 1.7 percent higher than the first quarter of 2018.
However, while new homes sales may be up, the median home prices is down. In 2019, the median prices is $302,700, as opposed to $335,400 in 2018. This is likely due to homebuilder’s recent shift toward more entry-level homes to address housing affordability concerns for first-time buyers.
The latest estimates also provide insight into new single-family housing inventories. Inventories had increased significantly over 2018, but appear to have stabilized or even dropped in recent months (the current months’ supply has fallen from 7.4 in December 2018 to 6.0 in March).
So while floorplans may be getting slightly smaller (which isn’t great for component manufacturers), the recent dip in rising inventories will likely pave the way to greater builder activity in the second quarter.