Sales of new homes fell in February when severe winter weather and supply problems disrupted a scorching hot housing market. and data Released Tuesday by the Department of Commerce.
The seasonally adjusted number of new homes sold fell 18.2 percent in February, to an annual rate of 775,000 from a revised 948,000 in January. Sales of new homes have declined in every region of the country as damaging winter storms wreaked havoc in the U.S., hitting an already tight supply of homes.
“There are now more real estate agents than real homes for sale in the US. “Existing home sales are recorded at the conclusion of the contract, so the decline is a reflection of the declining supply in December and January,” said Yelena Maleyev, an economist. by Grant Thornton, in a Tuesday analysis.
“Electricity outages in Texas and burst pipes in much of the South have probably also delayed the closure.”
A boom of home buyers powered by COVID-19 competing for a meager supply of new and existing homes for sale, prices have risen dramatically since last spring. According to the Department of Commerce, the average selling price of a home sold in February was $ 349,400 and the average selling price was $ 416,000.
The department estimates that only 312,000 new homes were for sale by the end of February, enough to cover 4.8 months at the current seasonally adjusted rate.
While the housing market boom is a boon for homeowners and those who can afford to upgrade or expand their real estate interests, it has also raised concerns about a possible market bubble. The rise in house prices, which is also driven by the shortage of housing materials, has also exacerbated a long-term affordability crisis, which could fuel even greater incomes and inequality in wealth.
‘The question is whether more affordable stock will be available for millennials entering their first home buying years. Mortgage rate movements will start to give up on some price-sensitive buyers, while rising material costs for builders hamper their ability to meet demand quickly and pass on costs to buyers, ”said Maleyev.