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First Cut: After a noisy few months, sales of new single-family homes back on trend in January

Sales of new single-family homes declined 6.9% in January to 607,000 after 652,000 in December. The decline comes after two months of recover from the near-term low of 552,000 in October. The level is similar to that seen in the July-September 2018 period and suggests that the January number is more-or-less on the underlying trend for sales of new homes.  Sales were down 6.9% compared to a year-ago.

These numbers are relatively old. The February data on new home sales will be reported at 10:00 ET on Friday, March 29. At that point, the data will be caught up after the delays related to the partial federal government shutdown.

Sales were sharply lower in three of four regions. The Midwest was down 28.6%, the South off 15.1%, and the Northeast down 6.9%. Sales were up 27.8% in the West.  Sales in the Northeast have not actually varied much over the past three months.  The Midwest may have been feeling the bite of a severe cold snap. The decrease in the South is more a return to trend after a couple of stronger months. The West will be seeing available new construction snapped up after wildfires destroyed housing stock.

The months’ supply of new homes available for sale rose to 6.6 in January, slightly higher than the 6.3 in the prior month and above the 5.6 months in January 2018.

The median price of a new single-family home was down 0.6% to $317,200 in January, a small decline month-over-month. More notable was the 3.8% drop from the year-ago price. Some of this reflects a shift to purchases of lower-priced units.

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