U.S. New-Home Sales Held Up in February Prior to Disruptions

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(Bloomberg) -- Purchases of new U.S. homes in February held close to an almost 13-year high, showing momentum in the residential real estate market before economic activity fell victim to the coronavirus.

Single-family home sales eased 4.4% to a 765,000 annualized pace, exceeding the median estimate in a Bloomberg survey, from an upwardly revised 800,000 rate in January. The median selling price increased 7.8% from a year earlier to a record $345,900, government data showed Tuesday.

Key Insights

  • Housing is set to downshift after enjoying low lending rates, steady job growth and elevated consumer confidence at the start of the year. While increased demand had economists penciling in a contribution to first-quarter growth from residential construction, the outbreak is likely depressing sales this month.
  • The number of new homes sold and not yet started rose to 231,000, the second-most since early 2007. Those figures indicate a pipeline for builders that could help keep workers at job sites depending on virus-related restrictions.
  • February purchases fell in the West and Midwest while the Northeast saw a surge in sales and the South, the biggest region, improved slightly from the prior month.

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  • The supply of homes at the current selling rate edged up to 5 months from 4.8 months.
  • The median forecast in a Bloomberg survey of economists projected an annual sales rate of 750,000 for February after a previously reported 764,000 a month earlier.
  • The government’s data on new-home sales are volatile on a month-to-month basis. Changes in the seasonally adjusted data have a wide margin of error.

©2020 Bloomberg L.P.

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