New Home Sales at 661,000 Annual Rate in January

Median New Home Price is Down 15% from the Peak

The Census Bureau reports New Home Sales in January were at a seasonally adjusted annual rate (SAAR) of 661 thousand. The previous three months were revised down.

Sales of new single‐family houses in January 2024 were at a seasonally adjusted annual rate of 661,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 1.5 percent above the revised December rate of 651,000 and is 1.8 percent above the January 2023 estimate of 649,000.
emphasis added

The first graph shows New Home Sales vs. recessions since 1963. The dashed line is the current sales rate.

New home sales were close to pre-pandemic levels. The second graph shows New Home Months of Supply.

The months of supply was unchanged in January at 8.3 months from 8.3 months in December. The all-time record high was 12.2 months of supply in January 2009. The all-time record low was 3.3 months in August 2020. This is well above the top of the normal range (about 4 to 6 months of supply is normal).

"The seasonally‐adjusted estimate of new houses for sale at the end of January was 456,000. This represents a supply of 8.3 months at the current sales rate."

On inventory, according to the Census Bureau:

"A house is considered for sale when a permit to build has been issued in permit-issuing places or work has begun on the footings or foundation in nonpermit areas and a sales contract has not been signed nor a deposit accepted."

Starting in 1973 the Census Bureau broke this down into three categories: Not Started, Under Construction, and Completed. The third graph shows the three categories of inventory starting in 1973.

The inventory of completed homes for sale (red) - at 80 thousand - is more than double the record low of 32 thousand in 2021 and early 2022. This is close to the normal level of completed homes for sale.

The inventory of homes under construction (blue) at 270 thousand is very high but is about 15% below the cycle peak in July 2022. The inventory of homes not started is at 106 thousand - this is the all-time high.