New home sales fell in February as harsh winter weather and supply problems interrupted a scorching housing market, said to data released Tuesday by the Department of Commerce.
The seasonally adjusted number of new-build homes sold fell 18.2 percent in February, falling to 775,000 year-on-year from the revised 948,000 in January. New home sales fell in every region of the country as damaging winter storms in the US wreaked havoc on the already tight housing supply.
“There are now more real estate agents than real homes for sale in the US. Sales of existing homes are recorded at the close of the contract, so the decline reflects the declining supply in December and January,” said Yelena Maleyev, an economist. . at Grant Thornton, in an analysis Tuesday.
“Power outages in Texas and burst pipes in much of the South have probably also delayed closures.”
A rise in home buyers Driven by COVID-19 competing for a meager supply of new and existing homes for sale, prices have driven up dramatically since last spring. The median selling price of a home sold in February was $ 349,400 and the median selling price was $ 416,000, according to the Department of Commerce.
The department estimated that only 312,000 new homes were for sale at the end of February, enough to cover 4.8 months at the current seasonally adjusted sales rate.
While the housing boom has been a boon to homeowners and those who can afford to upgrade or expand their real estate holdings, it has also raised concerns about a potential market bubble. The rise in house prices, also driven by a shortage of housing materials, has also exacerbated a protracted affordability crisis that could fuel even more income and wealth inequality.
“The question is whether a more affordable offer will be available to millennials entering their best years of buying a home. Fluctuations in mortgage interest rates will begin to price some price-sensitive buyers, while high material costs for builders hinder their ability to quickly meet demand and pass costs on to buyers, ”said Maleyev.