By Manuel Gutierrez, Consulting Economist to NKBA
Sales of new single family homes continued to increase in February, rising by 1.1 percent to a 640 thousand units annual sales rate. February marked the third consecutive monthly sales gain, and brought the sales rate — for the first time — to higher than it was in August 2022. Year over year, however, February’s sales were 17 percent lower.
- February’s sales were boosted by increases in the two largest regions, the West and the South. In the West, sales rose by 8 percent to a rate of 133 thousand. And in the South, the largest region with well over half of home sales, they increased by 3 percent to a 415 thousand sales rate.
- Sales in the Midwest region were virtually unchanged, dropping by just 1 percent in February to a 71 thousand sales rate. In contrast, a dramatic drop was seen in the Northeast, where sales fell by 40 percent to a rate of 21 thousand.
- In the first two months of this year, 114 thousand new homes were sold — 19 percent lower than in the same period last year. All regions were behind in that period compared to 2022, with the West experiencing the largest drop (40 percent to 23 thousand new homes sold), followed by the Midwest (20 percent to 12 thousand houses sold), the Northeast (17 percent to 5 thousand homes sold) and the South (7.4 percent to 75 thousand homes sold).
- In February, there were 436 thousand new single family homes for sale. However, fewer than one in five homes (17 percent) were “ready to move in” completed homes: 62 percent of the inventory were homes still under construction and, interestingly, 22 percent had not been started yet.
- Additionally, out of the single family homes that were sold in February, 42 percent were still under construction and 23 percent had yet to break ground.
