The U.S. Census Bureau reported new-home sales rose 7.9% month-over-month in January 2020 to the rate of 764,000—18.6% higher than the reported estimate from January 2019.
January saw an estimated 324,000 new homes for sales, which represents a supply of 5.1 months. The average sales price for a new home in January 2020 was $348,200 and the average sales price was $402,300.
The average sales price is 7.17% higher than the December estimate of $324,100.
CoreLogic's latest reading on home prices for January reported a 3.8% increase. Annual increases for the 10-City Composite in the CoreLogic report were 2.4%, which is an increase from November 2019’s 2%, and the 20-City Composite rose 2.9% year-over-year—also an increase from the prior month’s 2.5%.
Realtor.com’s Senior Economist George Ratiu said falling mortgage rates are bringing buyers back into the market.
“As buyers ringed in 2020 with lower interest rates and pushed the number of homes for sale to a two-year low, the festive mood felt the crimp of rising prices and global health worries. The housing market this year is marked by the rising influence of younger buyers, looking for affordable housing and quality of life,” Ratiu said. “The past decade has left real estate bereft of 3.8 million new homes, especially at the entry-level. There is no hiding from the need to build more homes in the moderately-priced ranges to satisfy a growing housing need for new generations.”
The Midwest region reported a 30.3% month-over-month increase in home sales in January 2020, with the West region reported a 23.5% increase. Home sales in the West region have risen 49.1% over the past year.
The South was the only region to post a month-over-month decline in home sales, with the Census Bureau reporting a 4.4% drop. Home sales in the region are down 2.4% since January 2019.
Affordability continues to be a strain on the market, as the Census Bureau revealed that home sales on properties priced under $200,000 represented just 9% of total sales for the month. Homes priced between $200,000 and $399,000 accounted for 55% of all home sales in January 2020.
Homes between $400,000 and $749,000 represented 30% of home sales for the month.