Sales: Following seasonal trends, new home sales in February (561 closed transactions) increased 25.5% from January but declined 32.3% from one year ago. Rising mortgage rates have slowed new home sales to below pre-covid levels as February sales were 17.6% below the 5-year average.
Inventory: New home listings (3,121) decreased 4.3% from January but increased 177.4% from one year ago. The large year-over-year increase is from a near record low of 1,125 listings in February 2022.
At the current sales pace, all the active inventory on the market would sell in 5.6 months, down from 7.3 in January and up from 1.4 in February 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 February was $333,242, a decrease of 2.6% from January but an increase of 5.0% from one year ago. Year-over-year price growth has moderated to the single digits for the third consecutive month, while it was in the double digits from July 2021 to November 2022 when it averaged 16.3%.
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 February averaged 67 days on the market (DOM), 28 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 640,000 in February. This represents a 1.1% increase from the revised January rate of 633,000 but is 19.0% below the February 2022 level of 790,000.
The median sales price for new homes ($438,200) increased 2.7% from January and 2.5% from February 2022.
Supply of new homes was estimated at 427,000 listings (seasonally adjusted) in February, a decrease of 2.5% from the prior month but an increase of 10.6% from one year ago. Months of supply also increased from 5.5 one year ago to 7.2 in February 2023.
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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.
Additional Resources: Database of building permits and housing starts for all Alabama Counties and metro areas.
