The news that January of this year brought with it a drop in home sales across the US housing market had some real estate investors and experts a little worried. But as many others predicted, February actually saw an increase in new home sales.
The US Real Estate Market- February 2019
According to reports from the US Census Bureau, new home sales of single-family homes were up by 4.9% month-over-month from January. The rate for February was at 677k which was a slight increase of 0.6% from the same time last year. The median sales price stood at $315,000 with the average sales price reported as $379,600.
The Midwest real estate market saw the largest gains in new home sales across the US. The Southern market also saw large gains- the largest the region has experienced since 2007.
When it comes to the sales of properties that are not even under construction yet, they rose as well by 14%. This was a one-year high of 197,000 units.
In terms of the national housing inventory, the supply was at an estimated 6.1 months. This is a drop from January’s 6.5 months of inventory and the lowest it has been since June 2018.
Why the Increase?
The pace of increase in new home sales is the best seen in almost a year, since March of 2018. A major reason for the jump is the fact that mortgage rates have recently been dropping. This allowed for homebuyers and investors to be able to afford to buy property. And as rates have been increasing consistently, it seems many buyers jumped at the opportunity to take advantage of the lower rates before they go up again. In addition to the drop in mortgage rates, the rise in property prices has been cooling across the nation allowing for many to enter the real estate market at last.
What the New Home Sales Increase Means for Investors
While the increase in new home sales is higher than a lot of experts forecasted, it’s a pretty normal sign that we are entering the spring real estate market. This is a season of real estate where home sales increase along with their prices. Competition is naturally high as a result because real estate investors will not only be competing with one another but with homebuyers as well. And with the inventory of homes for sale down, spring may be a hot seller’s market as it usually can be in many major metro areas across the nation during this time.
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