Even though mortgage rates have risen a bit and supply has dwindled, the data from February shows sales of newly constructed homes have hit their fastest pace since July 2016.
The Commerce Department has been spreading the news today and the news is good for the housing market. According to the released figures, new-home sales ran at a seasonally adjusted annual rate of 592,000. Don’t worry if this figure doesn’t have you jumping for joy, the important thing to know is that this is 6.1 percent higher than in January and 12.8 percent than February 2016, and higher, as with most things, is better.
As a point of reference, the highest adjusted annual rate since 1990 was 1,389,000 in July 2005 and the lowest adjusted annual rate was 270,000 in February 2011. As you can see, things have definitely turned around in the last 5 years. In fact, in a survey by MarketWatch at the end of last year, economists forecasted a 571,000 adjusted annual rate. This is exactly why surveys are taken frequently when the focus is the housing market.
A drop in home prices seems to be the leading theory as to why sales are spiking. Realtor.com shows that February’s median sales price was $296,200, down 3.9 percent for the month and 4.9 percent down from a year ago.
Improved housing data has been expected for some time as the economy slowly pulls itself out of a recession. This new demand has led to an increase in new home construction, which will inevitably lead to a jump in home prices.
If you were thinking about making the move to your new home, call your mortgage loan officer, because now may be the right time.