One of the first dominoes in the stability of the economy is located in a nation's real estate market and prices, in particular, who can and is paying for a brand new house? Generally, we get can get a good sense of the economy's health by examining the data on monthly new home sales. In recent days, we learned what these numbers look like for first month of the year.
For the month of January, sales of new single-family homes in the United States went up 3.7% to a seasonally adjusted annual rate of 555,000 units. It follows a downwardly revised 535,000 in the previous month, but lower than market expectations of 570,000.
Sales rose in the Northeast (15.8% to 44,000), the Midwest (14.8% to 70,000) and the South (4.3% to 290,000) but fell 4.4% in the West (to 151,000). The median sales price of new houses sold was $312,900 down from $316,200 in the previous month but up from $291,100 a year earlier. The average sales price was down to $360,900 from $378,900 in December and $365,600 a year earlier.
The stock of new houses for sale increased 3.5% to 265,000. This represents a supply of 5.7 months at the current sales rate.
Year-over-year, new home sales rose 5.5%.
The chart below shows the maximum amount of data for all new home sales in the United States. Note how we are still struggling to get off of the lows from 2007-2008. Ultimately, this is a sign that the economy is still nowhere near at the level in should be for economic strength.
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