US DATA
New home sales were basically unchanged in February at 662k annualized (677k expected, 664k January upwardly revised from 661k), maintaining their fairly narrow 600-700k range since the end of 2022. This is in some contrast to existing home sales which have seen a jump recently (a 12-month high of 4.38mln in February) as mortgage rates dipped, ostensibly reducing the opportunity cost to moving for existing homeowners with low-rate mortgages.
- The rebound in mortgage rates since then - amid a more hawkishly-perceived Fed outlook - is likely to keep a lid on existing sales activity while continuing to underpin new home sales.
- However, median sales prices of $400.5k (not seasonally adjusted) in February was the lowest since June 2021, and well off the peak of over $496k in late 2022 (average prices dipped to $485k, lowest since June 2022, vs the Dec 2022 peak of $568.7k) - suggesting that sustained higher rates and ample inventories are having a negative effect on prices.
- Inventories of new homes remain fairly elevated by historic standards at 8.4 months in February (up from 8.3 in both Jan and Dec), and especially compared to existing home inventories (2.9 months in February, an 11 month low).
- The 463k homes for sale (SA) in February were just below the recent peak of 466k and have risen steadily since mid-2023.
Source: Census Bureau, MNI
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