New home sales collapsed in February as harsh winter weather and supply problems disrupted a scorching housing market to the data published Tuesday by the Department of Commerce.
The seasonally adjusted number of new homes sold fell 18.2% in February, to an annualized rate of 775,000 from the 948,000 reviewed in January. New home sales fell in all regions of the country, as damaging winter storms wreaked havoc across the United States, causing an already tight supply of homes.
“There are now more real estate agents than real homes available for sale in the U.S. Existing home sales are recorded at the close of the contract, so the fall is a reflection of declining supply in December and January, “Yelena Maleyev, an economist at Grant Thornton, said in an analysis Tuesday.
“Power outages in Texas and broken pipes in much of the south are also likely to delay closures.”
A wave of home buyers driven by COVID-19 competing for a meager supply of new and existing homes for sale prices have risen dramatically since last spring. According to the Commerce Department, the average sale price of a home sold in February was $ 349,400 and the average sale price was $ 416,000.
The department estimated that there were only 312,000 new homes for sale at the end of February, enough to cover 4.8 months at the seasonally updated sales rate.
While the real estate market boom has been a boom for homeowners and those who can afford to upgrade or expand their real estate properties, it has also raised concerns about a potential market bubble. Rising house prices, which are also driven by shortages of housing construction materials, have also exacerbated a long-standing affordable cost crisis, which could fuel even more income and income inequalities. .
“The question is whether there will be a more affordable supply for millennials entering their early years of home buying. Movements of mortgage rates will begin to set prices for some price-sensitive buyers, while costs of materials for builders increase hindering their ability to meet demand quickly and pass on costs to buyers, “Maleyev said.