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Sales of new
single-family houses in February 2020 were at a seasonally adjusted annual rate
(SAAR) of 765,000 units (743,000 expected).
This is 4.4 percent (±14.8 percent)* below the revised January rate of 800,000
(originally 764,000), but 14.3 percent (±17.5 percent)* above the February 2019
SAAR of 669,000 units; the not-seasonally adjusted (NSA) year-over-year
comparison (shown in the table above) was +19.3%. For longer-term perspectives,
NSA sales were 44.9% below the “housing bubble” peak but 30.1% above the
long-term, pre-2000 average.
The
median sales price of new houses sold in February jumped ($20,500 or +6.3% MoM)
to a record $345,900; meanwhile, the average sales price increased to $403,800
($19,800 or +5.2%). Starter homes (defined here as those priced below $200,000)
comprised 11.8% of the total sold, up from the year-earlier 8.8%; prior to the
Great Recession starter homes represented as much as 61% of total new-home sales.
Homes priced below $150,000 made up 2.9% of those sold in February, up from 1.8%
a year earlier.
* 90% confidence interval includes zero.
The Census Bureau does not have sufficient statistical evidence to conclude
that the actual change is different from zero.
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As
mentioned in our post
about housing permits, starts and completions in February, single-unit
completions increased by 127,000 units (+14.1%). Although sales fell (35,000
units; -4.4%) while completions rose, inventory for sale contracted in absolute
terms (-3,000 units) but expanded in months-of-inventory (+0.2 month) terms.
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Existing home sales
advanced in February (350,000 units or +6.5%), to a SAAR of 5.77 million units.
Inventory of existing homes for sale expanded in absolute terms (+70,000 units)
but was unchanged in months-of-inventory terms. Because new-home sales fell while
resales rose, the share of total sales comprised of new homes retreated to 11.7%.
The median price of previously owned homes sold in February increased to $270,100
($3,900 or +1.5% MoM).
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Housing
affordability improved (+6.7 percentage points) as the median price of
existing homes for sale in January fell by $8,400 (-3.0; +6.9 YoY), to $268,600.
Concurrently, Standard &
Poor’s reported that the U.S. National Index in the S&P Case-Shiller CoreLogic
Home Price indices inched up at a not-seasonally adjusted monthly change of
less than +0.1% (+3.9% YoY).
"The
trend of stable growth established in 2019 continued into the first month of
the new year,” said Craig
Lazzara, Managing Director and Global Head of Index Investment Strategy at
S&P Dow Jones Indices. “The National Composite Index rose by 3.9% in
January 2020, and the 10- and 20-City Composites also advanced (by 2.6% and
3.1% respectively). Results for the month were broad-based, with gains in every
city in our 20-City Composite; 14 of the 20 cities saw accelerating prices. As
has been the case since mid-2019, after a long period of decelerating price
increases, the National, 10-City, and 20-City Composites all rose at a faster
rate in January than they had done in December.
“At
a regional level, Phoenix retains the top spot for the eighth consecutive
month, with a gain of 6.9% for January. Seattle, Tampa, and San Diego all rose
by 5.1%. Housing prices were particularly strong in the West and South, and
comparatively weak in the Midwest and Northeast.
“It
is important to bear in mind that today’s report covers real estate
transactions closed during the month of January. The COVID-19 pandemic did not
begin to take hold in the U.S. until late February, and thus whatever impact it
will have on housing prices is not reflected in today’s data.”
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The foregoing comments represent the general
economic views and analysis of Delphi Advisors, and are provided solely for the
purpose of information, instruction and discourse. They do not constitute a solicitation
or recommendation regarding any investment.
