U.S. New-Home Sales Drop Sharply, Again

[mahatmakanejeeves]

Source: The Wall Street Journal.

U.S. New-Home Sales Drop Sharply, Again

Continued deceleration in sales seen at the end of last year

By Sharon Nunn and Sarah Chaney

https://twitter.com/sharonmnunn

https://twitter.com/sechaney

Feb. 26, 2018 10:02 a.m. ET

WASHINGTON—Sales of new homes in the U.S. fell steeply at the beginning of 2018, continuing a deceleration in sales seen at the end of last year. ... Purchases of newly-built single-family homes—a relatively narrow slice of all U.S. home sales—dropped 7.8% to a seasonally adjusted annual rate of 593,000 in January, the Commerce Department said Monday. This bucks the 4.0% increase economists surveyed by The Wall Street Journal had expected.

A large drop in new-home sales in the Northeast, which experienced a particularly harsh winter, and in the South appeared to drive the overall nation’s sales lower at the beginning of 2018. Both regions saw the largest declines in more than a year. ... Purchases have now declined four out of the past six months.

From a year earlier, sales also dropped, falling 1.0% in January. The pace of new-home sales remains well below the elevated levels seen before the 2007-09 financial crisis and recession. ... More widely, housing market inventory has been tight, driving up home prices and pricing some potential buyers out of the market. In January, sales of previously owned homes, which represent the bulk of the U.S. market, experienced their sharpest year-over-year drop in more than three years. But in January, at the current sales pace, new-home supply reached 6.1 months, the highest level since the middle of 2014.

Still, home builders’ future expectations of single-family home sales rose to its highest level since the peak of the housing bubble, according to the National Association of Home Builders, suggesting new-home sales could pick up in the coming months. ... The data on home-builder sentiment “now points to solid gains over the next few months, but we’re expecting a softer second half” of the year, Ian Shepherdson, chief economist at Pantheon Macroeconomics, previously said in a note to clients.
....

Write to Sharon Nunn at [e-mail] and Sarah Chaney at [e-mail]

Read more: https://www.wsj.com/articles/u-s-new-home-sales-drop-sharply-again-1519657336

[exboyfil]

1. My kid is in the process of purchasing a home

probably worth $40K more than mine. I tried to advice against it, but you know, kids.

She grew up in a 3 bedroom two story with all the bedrooms upstairs. She is purchasing a home with the master downstairs and the two other bedrooms upstairs. I tried to tell her that she will be sleeping in that upstairs bedroom for probably four years or so until her kids are old enough.

[politicaljunkie41910]

2. Does this mean people didn't run out and buy new homes with those bonus

checks they received as a result of that UUUggee Tax Cut?

"...Still, home builders’ future expectations of single-family home sales rose to its highest level since the peak of the housing bubble, according to the National Association of Home Builders, suggesting new-home sales could pick up in the coming months. ... "

Maybe they're waiting for next years' bonus?

[Javaman]

3. huh oh, not good with spring around the corner.

this is not a good sign.

[leftyladyfrommo]

4. there is a huge shortage of houses to buy here in KC area

and the prices are going through the roof.

The median sales price in Johnson County, Ks is $269,000.
Normally there are about 6600 units for sale. Right now there are 1300. People are offering more than the SP in order to get in

Good for sellers but bad for people looking to buy..

[BlueIdaho]

5. Guess that buck fifty a paycheck

Isn’t really having that magic multiplier effect these morons hoped for...

[Mosby]

6. the Phoenix market is going great

http://jonknutson.co/uncategorized/2018-phoenix-real-estate-market-prediction

[IronLionZion]

7. The only solution to this problem is tax cuts for the wealthiest

oh wait...

[melm00se]

8. The issue is

that there is a shortage of houses in the lower end of the market.

The shortage of properties is concentrated at the lower end of the market. While the number of previously-owned homes on the market rose 4.1 percent to 1.52 million units in January, housing inventory was down 9.5 percent from a year ago.

https://www.reuters.com/article/us-usa-economy-housing/tight-supply-rising-prices-undercut-on-u-s-home-sales-idUSKCN1G51W1

My house is in this sweet spot for my market and I have been averaging 5 calls a week asking if I want to sell my house.

[Lucky Luciano]

9. Sales dropped the most in the Northeast - SALT deductions anyone?

Property taxes are on the order of 30-50K in Westchester county! Only deducting 10K (forget about the NYS taxes etc) is a bonecrusher!