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New Home Sales Decline in February and That's Before Huge Mortgage Rate Hikes

New home sales for February declined two percent in February from revised lower January numbers.
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New Home Sales data from Census Department, chart by Mish

New Home Sales data from Census Department, chart by Mish

Key New Home Sales Points

  • New Home Sales Sales of new single‐family houses in February 2022 were at a seasonally adjusted annual rate of 772,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development.
  • This is 2.0 percent below the revised January rate of 788,000 and is 6.2 percent  below the February 2021 estimate of 823,000. 
  • The median sales price of new houses sold in February 2022 was $400,600. The average sales price was $511,000. 
  • The seasonally‐adjusted estimate of new houses for sale at the end of February was 407,000. This represents a supply of 6.3 months at the current sales rate.  

To put the annualized sales in perspective, the actual  number of homes sold in February was 65,000.

New Home For Sale by Stage of Construction

New Home For Sale data from Census Department, chart by Mish

New Home For Sale data from Census Department, chart by Mish

Month's Supply of New Homes For Sale 

New Home Supply data from Census Department, chart by Mish

New Home Supply data from Census Department, chart by Mish

The supply of new homes for sales is calculated by dividing the total number of homes for sale over the number of homes sold in one month.

The supply is overstated. 105,000 homes have not been started and only 37,000 are completed. 

Builder Speculation

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There are 259,000 homes under construction that have not been purchased. 

This is a high number historically and it is at a time of rapidly rising mortgage rates with sales declining.

Existing Home Sales Dive 7.2 Percent Wiping Out January's Big Month

Also note Existing Home Sales Dive 7.2 Percent Wiping Out January's Big Month

Mortgage rates are up, sales are down big. Get used to this story.

This post originated at MishTalk.Com.

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