New-home sales declined in February, dropping 1.6% from January’s downwardly revised estimate to a seasonally adjusted annual rate of 313,000, according to data released today by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development. However, the news came with a footnote: With a standard error margin of plus or minus 23.9%, the change is not statistically significant, meaning it’s unclear whether numbers actually decreased, increased, or stayed the same.
The report also showed some bright spots. Year-over-year, sales were up 11.4% (although that number is also in question due to the uncertainty of February’s estimate). Despite the reported lowering of sales, both the average and median sales prices for new homes sold during the month were up, to $267,700 and $233,700, respectively, thanks to a pickup in sales of homes priced between $200,000 and $399,999.
And while January’s estimate was revised down to 318,000 (from 321,000 previously), estimates from November and December were revised up to 322,000 and 336,000, respectively (from 318,000 and 324,000). Total inventory, at 150,000 units, fell to the lowest level on record (data start in 1963).
The report seemed to contradict other reports that have indicated a recent pickup in activity. "The weak numbers (assuming they are more or less correct) raise a crucial question," wrote Patrick Newport, U.S. economist at IHS Global Insight, in a release discussing the numbers today. "If new homes are not selling, then why are builder confidence and single-family housing permits moving up, and why is the S&P home builder index up 80% since last October? Time will tell if builders and investors have gone out on a limb." Still, he added, "taking the numbers at face value, new home sales are higher than they were six months ago."
Claire Easley is a senior editor at Builder.
Learn more about markets featured in this article: Greenville, SC.