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New Home Sales Statistics Show a Slow Start to 2019

The U.S. Census Bureau and the Department of Housing and Urban Development jointly announced their residential sales statistics for January 2019. This comes on the heels of their announcement six days ago of the December statistics as the government entities try to make up for time lost due to the government shutdown.

Monthly New Residential Home Sales

Sales of new single‐family houses in January 2019 were at a seasonally adjusted annual rate of 607,000. This is 6.9 percent below the revised December rate of 652,000 and is 4.1 percent below the January 2018 estimate of 633,000. The fact that sales fell off in January doesn’t come as much of a surprise to many nationwide players in the real estate and mortgage industry who have seen reduced activity levels early in the year. Interest rates, however, have been falling and might provide some relief for a market looking to regain momentum. With the economy expected to continue to grow, albeit at a slow rate,  Freddie Mac is still predicting the total housing market will bounce back and post a modest growth for 2019 ( $6.1M total sales in 2019 vs $5.97M in 2018). So maybe it’s just a slow start or maybe existing home sales can make up the difference.

The median sales price of new houses sold in January 2019 was $317,200, down from a 2018 median price of $325,300 and a December median price of 319,100. The average sales price was off similarly.  Most experts are forecasting annual price growth in the 4%-4.5% range this year. But with a 6.6 month supply of houses on the market in January 2019 vs a 5.6 month in January 2018 you have to wonder if the slowdown in sales and increased inventory will continue to put downward pressure on prices like we saw in 2018.

Regionally, the west was the only bright spot rising 27.8 percent from December, although still down 3.2 percent vs year prior. Northeast sales were consistent, if nothing else, falling by 11.4 percent both month over month and month vs year prior. The Midwest sales were down 28.6 percent month over month and 41.9 percent vs year prior while sales in the south declined by 15.1 percent vs December but grew year-over-year by 6.2 percent.

 

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