Online real-estate brokerage Redfin reported Friday that sales of new single-family homes dropped 8% in January compared with January 2018 sales. Sales fell in all four regions of the country. Sales of all homes, new and exiting, fell 7.6% in January.
The better news is that the month-over-month drop was smaller; in December 2018 the year-over-year drop was 12.6%. Only in the West region were year-over-year sales lower in January than in December.
Daryl Fairweather, Redfin’s chief economist, said:
The shrinking size of sales declines, paired with falling interest rates, may be helping to improve builder confidence, which has been on the rise since December. Still, buyers understand that the market is shifting in their favor and have become more sensitive to high home prices. That added sensitivity could continue to put a damper on the sales of new homes, which tend to be more expensive than comparable existing ones.
The national median price for a new home rose 1.2% year over year to $339,000, and the new-home inventory rose by 0.2% compared to January 2018. There is an 8.3-month supply of new homes nationally while the inventory in the Northeast dropped nearly 2% to an 11.7-month supply. The median price of a new-home sale in the Northeast rose 6.8% to $479,950.
Inventory levels of new homes for sale in the West rose slightly in January to a 6.9-month supply and rose sharply in the Midwest to 10.6 months of supply. New home prices rose 4% in the Midwest to a median of $343,160 and rose 1.4% in the West to a median of $435,120.
The median January sales price for new homes in the South was $291,000, and the inventory of new homes for sale fell by 1.2% to 8.1 months of supply.
In its announcement of the January sales data, Redfin noted:
Due to the partial government shutdown from December 22 to January 25, the data for the end of 2018 and the first month of 2019 hasn’t been released [by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau]. Redfin released November and December 2018 and January 2019 data on single-family new-home sales to bridge the gap as the effects of the shutdown continue.