New Home Sales Slump In January, Despite Drop In Prices

Following a rebound in November and December, January's (delayed due to the govt shutdown) new home sales plunged 6.9% MoM despite a jump in homebuilder sentiment.

This pushes year-over-year growth in new home sales back into decline

Sales of new U.S. homes in January fell to the weakest pace since October, driven by a decline in the Midwest as still-elevated prices keep buyers on the sidelines.

The number of properties sold for which construction hadn’t yet started declined to 183,000, the lowest in three months, showing a weaker pipeline of building for the coming months.

The sales drop occurred despite a drop in the median sales price, down 3.8% from a year earlier to $317,200.

As a reminder, new-home purchases are seen as a timelier barometer of the market, as they’re calculated when contracts are signed rather than when they close, like the previously-owned homes data.