Although the basic trend in the real estate market remains strong, the sales figures of newly established single household households in the United States unexpectedly declined in February due to rising mortgage interest rates and a long-term shortage of second-hand housing in the market.

New house sales have declined, but the market tone is strong

In February, sales of newly established single household households in the United States unexpectedly decreased due to the impact of rising mortgage interest rates. However, due to the long-term shortage of second-hand housing in the market, the overall trend still shows a strong market tone. According to a report from the Ministry of Commerce, the median price of new homes last month was the lowest in two and a half years, while the supply was the highest since November 2022. Builders are increasing their construction efforts while offering price cuts and other preferential measures, as well as reducing floor area to make housing more affordable.

Sales and price dynamics

The sales of new houses decreased slightly by 0.3%, with an adjusted annualized sales rate of 662,000 units. Nevertheless, sales in February increased by 5.9% compared to the same period last year. The new housing market seems to have reversed the impact of the Federal Reserve's 525 basis point interest rate hike since March 2022, thanks to a shortage of second-hand housing supply.

Regional differences and housing price trends

Last month, new home sales plummeted by 31.5% in the Northeast and 2.4% in the Midwest of the United States. However, sales increased by 3.7% and 2.3% respectively in the densely populated southern and western regions. The median price of new houses in February was $400500, the lowest since June 2021, a decrease of 7.6% compared to a year ago.

Supply and Construction Completion Status

In February, the supply of new houses in the market reached 463000 units, the highest since November 2022, an increase from 457000 units in January. According to the sales speed in February, the time to clear the market for properties is 8.4 months, slightly increasing from 8.3 months in January. In the inventory, 58.7% of the houses are under construction, 22.9% are not yet built, and 18.4% are completed.