February 2024 Residential Sales, Inventory and Prices

Click image for larger view

Click image for larger view

Sales of new single-family houses in February 2024 were at a seasonally adjusted annual rate (SAAR) of 662,000 units (675,000 expected). This is 0.3% (±16.2%)* below the revised January rate of 664,000 (originally 661,000 units), but 5.9% (±14.3%)* above the February 2023 SAAR of 625,000 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 52.3% below the “housing bubble” peak and 14.8% above the long-term, pre-2000 average.

The median sales price of new houses sold in February 2024 was $400,500 (-3.5% MoM, or $14,400). The average sales price was $485,000 (-7.3%, or $38,400). Homes priced at/above $750,000 comprised 11.7% of sales, little changed from the year-earlier 11.9%.

* 90% confidence interval includes zero. The Census Bureau does not have sufficient statistical evidence to conclude that the actual change is different from zero.

Click image for larger view

As mentioned in our post about housing permits, starts and completions in February, single-unit completions jumped by 180,000 units (+20.2%). Sales ticked lower (2,000 units, or -0.3%), so inventory for sale expanded in both absolute (+6,000 units) and months-of-inventory (8.3 months) terms. 

Click image for larger view

Existing home sales surged (380,000 units or +9.5%) in February to a SAAR of 4.38 million units (3.92 million expected). The inventory of existing homes for sale expanded in absolute terms (+60,000 units) but shrank in months-of-inventory terms (-0.1 month). Because new sales retreated while resales advanced, the share of total sales comprised of new homes decreased to 13.1%. The median price of previously owned homes sold in February rose to $384,500 (+1.6% or $5,900).

Click image for larger view

Housing affordability rose 3.3 percentage points as the median price of existing homes for sale in January retreated by $2,300 (-0.6% MoM; +5.0% YoY) to $383,500. Concurrently, Standard & Poor’s reported that the U.S. National Index in the S&P Case-Shiller CoreLogic Home Price indices slipped by a not-seasonally adjusted monthly change of -0.1% (but +6.0% YoY).

“U.S. home prices continued their drive higher,” said Brian Luke, Head of Commodities, Real & Digital Assets at S&P Dow Jones Indices. “Our National Composite rose by 6% in January, the fastest annual rate since 2022. Stronger gains came from our 10- and 20-City Composite indices, rising 7.4% and 6.6%, respectively. For the second consecutive month, all cities reported increases in annual prices, with San Diego surging 11.2%. On a seasonally adjusted basis, home prices have continued to break through previous all-time highs set last year.”

“We’ve commented on how consistently each market performed during 2023 and that continues to be the case. While there is a large disparity between leaders such as San Diego versus laggards such as with Portland, the broad market performance is tightly bunched up. This is also true of high and low tiers. The average annual gains between high and low tiers across cities tracked by the indices is just 1.1%. Low price tiered indices have outperformed high priced indices for 17 months. Homeowners most likely saw healthy gains in the last year, no matter what city you were in, or if it was in an expensive or inexpensive neighborhood. No matter which way you slice it, the index performance closely resembled the broad market.”

“On a monthly basis, home prices continue to struggle in the face of elevated borrowing costs. Seventeen markets dropped over the last month, while Minneapolis has posted a 2.4% decline over the prior three months. Only Southern California and Washington D.C. have stood up to the rising wave of interest rates and delivered positive returns to start the year. San Diego rose 1.8% in January, followed by DC with 0.5% and Los Angeles at 0.1%.”

Click image for larger view

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.