New Home Sales Decline in February: What This Means for the Housing Market

By Eleanor Harrison Mar25,2024
February Sees a Decline in New Home Sales

New home sales declined in February, going against the trend of an increase in sales of previously owned homes. According to data from the U.S. Census Bureau, if the sales of new homes were to continue at the same rate throughout the year, approximately 662,000 homes would be sold. This figure is slightly below the expectations of economists surveyed by the Dow Jones Newswires and Wall Street Journal, who predicted an annual rate of 675,000 new home sales. Despite this decline from January’s revised annual rate, the number of new home sales in February was still 5.9% higher than the same time last year.

In contrast, existing home sales saw a boost of 9.5% in February due to slightly lower interest rates that alleviated some of the market’s stagnation. However, high interest rates have made current homeowners wary of selling their homes and purchasing new ones with higher mortgage rates. This has led to a reduced inventory of homes for sale and prompted economists to suggest that building more new homes would help stimulate the market.

Nancy Vanden Houten, an economist at Oxford Economics, predicts that the pace of new home sales will increase throughout 2024, supported by lower mortgage rates, increased supply and a scarcity of existing homes for sale. Despite this slight decline in February

By Eleanor Harrison

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