New home sales plummeted in February as severe winter weather and supply problems disrupted a burning hot housing market, according to to date launched on Tuesday by the Department of Commerce.
The seasonally adjusted number of new homes sold fell 18.2 percent in February, falling at an annualized rate of 775,000 from 948,000 revised in January. New home sales fell in every region of the country as harmful winter storms wreaked havoc in the United States, straining an already tight supply of homes.
“There are now more realtors than real homes available for sale in the US Sales of existing homes are recorded at the end of the contract, so the decline is a reflection of declining supply in December and January,” said Yelena Maleyev, an economist at Grant Thornton. in an analysis on Tuesday.
“Texas power outages and the explosion of pipes in much of the south have probably delayed the closures.”
A wave of home buyers led by COVID-19 competing for a weak supply of new and existing homes for sale prices have risen dramatically since last spring. The average sale price of a house sold in February was $ 349,400, and the average sale price was $ 416,000, according to the Commerce Department.
The department estimated that only 312,000 new homes were put up for sale by the end of February, enough to cover 4.8 months at the current seasonal sales rate.
While the real estate market boom has been a boon for homeowners and those who can afford to modernize or expand their real estate properties, it has also raised concerns about a potential market bubble. Rising house prices, which are also driven by a lack of house building materials, have also exacerbated a long-term crisis in accessibility, which could fuel even greater income and wealth inequality.
“The question is whether a more affordable offer will be available for millennia entering the first years of home buying. Mortgage rate movements will begin to appreciate some price-sensitive buyers, while rising material costs for builders are hampering their ability to meet demand quickly and pass on costs to buyers, “Maleyev said.