New home sales remaining on trend but supply creeping up to 17 yr high

New home sales in January totaled 657k, below the estimate of 680k but December was revised up by 36k to 734k. This is a volatile month to month so best to smooth it out. The 3 month average is now 690k vs the 6 month average of 685k and which compares with the 2024 average of 686k. For further perspective, the average in 2019 was 685k.

Months’ supply rose to 9.0 from 8.0 in December and 8.6 in November. Interestingly, the absolute number of new homes on the market now total 495k, the most since December 2007. The median home price, highly influenced by mix, rose 3.7% y/o/y and 7.5% m/o/m.

In January, where these contracts were signed, the average 30 yr mortgage rate averaged 7.02% vs 6.82% in December and vs 6.88% right now so we’ll hope to see a home purchase lift in February, though we it hasn’t been reflected in weekly mortgage applications this month which are down by 8% month to date vs January 31st.