Sales of new
single-family houses in February 2022 were at a seasonally adjusted annual rate
(SAAR) of 772,000 units (810,000 expected). This is 2.0% (±11.9%)* below the revised
January rate of 788,000 (originally 801,000 units) and 6.2% (±13.7%)* below the
February 2021 SAAR of 823,000 units; the not-seasonally adjusted (NSA)
year-over-year comparison (shown in the table above) was -7.1%. For longer-term
perspectives, NSA sales were 44.4% below the “housing bubble” peak but 24.3%
above the long-term, pre-2000 average.
The
median sales price of new houses sold in February 2022 fell by 6.3% (-$26,800),
to $400,600. The average sales price rose
by 3.4% (+$17,000), to a record-high $511,000. Homes priced at/above $750,000
were 9.2% of sales, up from the year-earlier 7.1%.
* 90% confidence interval includes zero. The Census Bureau does not have sufficient statistical evidence to conclude that the actual change is different from zero.
As mentioned in our post about housing permits, starts and completions in February, single-unit completions jumped by 112,000 units (+12.1%). Sales retreated (16,000 units; -2.0%), resulting in inventory for sale expanding in both absolute (9,000 units) and months-of-inventory (+0.2 month) terms.
Existing home sales declined in February (470,000 units or -7.2%), to a SAAR of 6.02 million units (6.170 million expected). Inventory of existing homes for sale expanded in absolute (+20,000 units) and months-of-inventory (+0.1 month) terms. Because new home sales retreated by a smaller margin than resales, the share of total sales comprised of new homes rose to 11.4%. The median price of previously owned homes sold in February advanced to $357,300 ($7,300 or +2.1% MoM).
Housing affordability fell (3.9 index points) even though the median price
of existing homes for sale in January retreated by $4,200 (-1.2% MoM; +15.9 YoY),
to $357,100. Concurrently, Standard & Poor’s reported that the U.S. National Index in the S&P Case-Shiller
CoreLogic Home Price indices rose at a not-seasonally adjusted monthly change
of +1.1% (+19.2% YoY).
“Home
price changes in January 2022 continued the strength we had observed for much
of the prior year,” said Craig
Lazzara. “The National Composite Index recorded a gain of 19.2% for the 12
months ended in January 2022; the 10- and 20-City Composites rose 17.5% and
19.1%, respectively. All three composites reflect a small acceleration of price
growth for January 2022.
“Last
fall we observed that home prices, although continuing to rise quite sharply,
had begun to decelerate. Even that modest deceleration was on pause in January.
The 19.2% year-over-year change for January was the fourth-largest reading in
35 years of history.
“The
strength in home prices continues to be very broadly based. All 20 cities saw
price increases in January 2022, with prices in 16 cities accelerating relative
to December’s report. January’s price increase ranked in the top quintile of
historical experience for 19 cities, and in the top decile for 17 of them.
“Phoenix’s
32.6% price increase led all cities for the 32nd consecutive month. Tampa
(+30.8%) and Miami (+28.1%) continued in silver and bronze positions in
January. Prices were strongest in the South (+26.6%) and Southeast (+26.5%),
but every region continued to log impressive gains.
“The macroeconomic environment is evolving rapidly. Declining COVID cases and a resumption of general economic activity has stoked inflation, and the Federal Reserve has begun to increase interest rates in response. We may soon begin to see the impact of increasing mortgage rates on home prices.”
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.
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