U.S. median home sales prices rose 1.8% month-over-month in January
The U.S. Census Bureau and the U.S. Department of Housing and Urban Development (HUD) have jointly announced that sales of new single‐family homes nationwide in January 2024 were at a seasonally adjusted annual rate of 661,000, 1.5% above the revised December 2023 rate of 651,000, and 1.8% above the January 2023 estimate of 649,000.
“In January, the median sales price nationally for a new home increased 1.8% from December to $420,700, but remains down 2.6% compared with one year ago,” said First American Economist Ksenia Potapov. “Prices have moderated from their peak of nearly $500,000 in October 2022, but remain significantly higher compared with pre-pandemic levels.”
HUD and the Census Bureau also reported that the median sales price of new houses sold in January 2024 was $420,700, with the average sales price at $534,300 nationwide.
“The outlook for the new single-family home market is positive, but there are challenges,” said Potapov. “Potential home buyers are sensitive to mortgage rate fluctuations and long-term interest rates have risen again in recent weeks in response to stronger-than-expected economic data.”
As the National Association of Home Builders (NAHB) recently reported in its NAHB/Wells Fargo Housing Market Index (HMI), builder confidence in the market for newly built single-family homes climbed four points to 48 in February, marking the third consecutive month of gains in builder sentiment. This marked the highest level recorded by NAHB since August 2023.
NAHB Chair Alicia Huey added, “Buyer traffic is improving as even small declines in interest rates will produce a disproportionate positive response among likely home purchasers. And while mortgage rates still remain too high for many prospective buyers, we anticipate that due to pent-up demand, many more buyers will enter the marketplace if mortgage rates continue to decline this year.”
HUD and the Census Bureau reported that the seasonally‐adjusted estimate of new houses for sale at the end of January was 456,000—a supply of 8.3 months at the current sales rate.
Positive builder sentiment is expected to continue as the Federal Reserve, for the fourth meeting in a row of the Federal Open Market Committee (FOMC), made the call that their best course of action was to do nothing with interest rates, holding rates steady at 5.50%.
While the Federal Reserve is still expected to cut interest rates later this year and with fundamental demand remaining strong, builders are optimistic for the future,” said Potapov. “However, the significant boost in home sales activity typical for the spring home-buying season may be delayed later into the summer.”
