Sales of new homes plummeted in February, with severe winter and supply problems disrupting a scorching housing market, according to for data launched Tuesday by the Department of Commerce.
The seasonally adjusted number of new homes sold fell 18.2 percent in February, falling to an annualized rate of 775,000 from a review of 948,000 in January. Sales of new homes fell in all regions of the country, as winter storms ravaged the United States, hampering the supply of already scarce homes.
“There are now more real estate agents than real houses available for sale in the United States. Existing home sales are recorded at the end of the contract, so the drop is a reflection of the decline in supply in December and January, ”said Yelena Maleyev, an economist at Grant Thornton, in an analysis on Tuesday.
“Power outages in Texas and pipe ruptures in much of the South were also likely to delay shutdowns.”
ONE increase in home buyers driven by COVID-19 competing for a scant supply of new and existing homes for sale, prices have risen dramatically since last spring. The average sale price for a home sold in February was $ 349,400 and the average sale price was $ 416,000, according to the Department of Commerce.
The department estimated that only 312,000 new homes were for sale by the end of February, enough to cover 4.8 months with the current seasonally adjusted sales rate.
While the housing boom has been a blessing for homeowners and those who can afford to upgrade or expand their properties, it has also raised concerns about a potential market bubble. The rise in house prices, which is also driven by the scarcity of building materials, has also exacerbated a long-standing economic accessibility crisis that could fuel an even greater inequality in income and wealth.
“The question is whether a more affordable supply will be available for the millennium generation that is entering its first years of home purchase. Mortgage rate movements will begin to lower the price of some price-sensitive buyers, while rising material costs for builders are hampering their ability to meet demand quickly and pass on costs to buyers, ”said Maleyev.