Preview: Due February 26 - U.S. January New Home Sales - Responding to lower mortgage rates
We expect a January new home sales total of 690k, which would be a 3.9% increase if December’s 8.0% increase to 664k is unrevised. November’s outcome of 615k was a 12-month low. 690k would be a 4-month high.
January’s NAHB homebuilders’ index suggests the improvement in December sales will be extended, with February’s NAHB data suggesting further improvement. Most indicators of housing demand have been giving a similar message, with demand apparently responding to falls in mortgage rates in late 2023. While this signals a rise in new home sales, weather, which helped cause a sharp fall in January housing starts, is a downside risk, particularly in the Midwest.
We expect the median and average prices to slip by 1.0% on the month, maintaining a negative picture. However, due to a very weak January 2023, yr/yr data would then bounce, to -5.3% from -13.8% for the median and to -2.7% from -14.3% for the average.
