The December surge in sales of new single-family houses was apparently a blip, possibly caused by builders rushing to complete homes in California in advance of tougher building codes, new home sales data for January show.
The Commerce Department reported Thursday that January new-home sales fell 12.6% from December to a seasonally adjusted annual rate of 284,000. The December rate was downwardly revised from 329,000 to 325,000. Analysts were expecting a January rate of 303,000 annual sales.
Prices also fell, with the median sales price of new home sold in January at $230,600. This was down from a revised December median price of $235,000.The original December median price estimate for December had been $241,500.The average sales price fell precipitously, dropping from $290,700 in December to $260,300 in January. This provided further evidence of a December sales surge in California, where prices trend higher.
New-home inventory at the end of January was 188,000, a supply of 7.9 months at the current sales rate, up from a 6.9-month supply in December.
The data for January continued to exhibit unusual volatility, suggesting that the relatively small number of home sales has degraded the quality of the samples used by the Commerce Department. Both the magnitude of the revisions to the December numbers and the regional data for January point to instability, with the margins for error for the year-over-year comparisons running plus or minus 15.4% nationally, 54.1% in the Northeast, 32.2% in the Midwest, 18.4% in the South and 41.6% in the West.
The month-to-month margins were even larger, with the Northeast at a staggering plus/minus 82.5%, the Midwest at 55.7%, the South at 18.7% and the West at 20.4%. For survey data to be considered reliable, the margin for error is normally less than 5%.
Consequently, the Commerce Department reported a 54.5% increase in new-home sales in the Northest to a seasonal pace of 34,000, still 19% behind January, 2010's pace. It has sales up 17.1% to a pace of 41,000 in the Midwest, still 25.5% off January last year.
Those supposed gains were more than wiped out by the estimate for the South, the largest region by far, which Commerce said was down 12.8% to a pace of 143,000, 17.8% off last year's pace. It had the West down 36.5% to a rate of 66,000, 15.4% below January, 2010, another statistic pointing to a California code rush.
The new-home inventory estimate of 188,000, on the other hand, carried a margin for error of 1.2%.
The seasonally adjusted annual rate has been bouncing in a range bound by December's high of 325,000 to a low of 274,000 in August, 2010 since the expiration of the federal home-buyer tax credit in April, 2010. For that month, the annual sales estimate had risen to 414,000. Sales of roughly 600,000 are considered a "normal" market.