ACRE Commentary: New home sales nationwide rebounded in January with the seasonally adjusted annual rate rising 7.2% from December. However, sales were down 19.4% from one year ago. One factor leading to rising sales activity was the decline in new home prices, which fell 8.2% from December and 0,7% from January 2022.
Following national trends, new home sales in Alabama also decreased from the prior year, falling 33.4% from January 2022. Price growth continued with the statewide median sales price rising 7.1% year-over-year, but is expected to moderate to the 3-5% range in the coming months.
Slowing sales activity at the state and national levels has resulted in more inventory available on the market. Both markets are somewhat over supplied as Alabama has 7.3 months of new home supply while the national market has 7.9. A balanced market will have 4-5 months of supply.
Sales: According to the Alabama Realtors, new home sales in January 447 closed transactions) decreased 41.6% from December and 32.3% from one year ago. New homes represented 13.4% of all residential sales in Alabama during January, down from 13.5% from one year ago.
Inventory: New home listings (3,260) increased 2.2% from December and 170.8% from one year ago. At the current sales pace, all the active inventory on the market would sell in 7.3 months, up from 4.2 in December and up from 1.8 in January 2022. The equilibrium point where buyers and sellers have roughly equal bargaining power is 4-5 months of supply.
Pricing: The median sales price for new construction in January was $342,054, an increase of 2.7% from December and 7.2% from one year ago. The differing sample size (number of residential sales of comparative months) can contribute to statistical volatility, including pricing. ACRE recommends consulting with a local real estate professional to discuss pricing, as it will vary from neighborhood to neighborhood.
New homes sold in January averaged 67 days on the market (DOM), 32 days slower than one year ago.
National Overview: According to the U.S. Census Bureau, new home sales nationwide were at a seasonally adjusted annual rate of 670,000 in January. This represents a 7.2% increase from the revised December rate of 625,000 but is 19.4% below the January 2022 estimate of 831,000.
The median sales price for new homes ($427,500) decreased 8.2% from December and 0.7% from January 2022.
Supply of new homes was estimated at 439,000 listings (seasonally adjusted) in January, a decrease of 2.9% from the prior month but an increase of 11.4% from one year ago. Months of supply also increased from 5.7 one year ago to 7.9 in January 2022.
Click here to view the entire monthly report.
Monthly New Home Sales Data: Athens, Baldwin County, Birmingham, Calhoun County, Gadsden, Huntsville, Lee County, Marshall County, Mobile, Montgomery, Morgan County, Tuscaloosa, and the Wiregrass region.
The Alabama New Construction Monthly Report is developed in connection with the Alabama Association of Realtors.
Additional Resources: Database of building permits and housing starts for all Alabama Counties and metro areas.
