US new home sales ticked down surprisingly in February, according to government data released Monday, after January’s rate was revised higher.
New single-family home sales were at an annual rate of 662,000 last month, seasonally adjusted, 0.3 percent down from the revised 664,000 figure for January, said the Commerce Department.
The median sales price of new properties sold was $400,500, lower than the month prior as well.
The slight decreases come as mortgage rates remain at a much higher level than in recent years.
But the situation has also made homeowners reluctant to enter the market to sell their real estate, having locked in lower rates previously, which leads to supply shortages.
In turn, this has supported the sales of new properties, which had risen monthly from November to January.
Compared with a year ago, sales of new single-family houses were 5.9 percent higher this February.
Analysts warn, however, that new home sales figures can be volatile.
“The underlying trend is what matters and we think the recovery in sales that began in January has further to run,” said Oliver Allen, senior US economist at Pantheon Macroeconomics.
He expects declines in mortgage rates this year to “lead eventually to a revival in mortgage demand.”
Home builders are also upbeat in the near-term, he said, “probably because the chronic shortage of existing homes for sale is continuing to push many more buyers than usual into the new home segment of the market.”
With mortgage rates now much higher than before, it has become more expensive for people to move.
This has allowed home builders to gain market share, and new home sales have become “decoupled from overall mortgage demand” in recent years, Pantheon said in an earlier report.
As of March 21, the popular 30-year fixed-rate mortgage averaged 6.87 percent according to Freddie Mac, sharply higher than in March 2021 when the rate was between 3.0 percent and 3.2 percent.
