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US new home sales unexpectedly drop in February

Sales of new US single-family homes unexpectedly fell in February, according to figures released on Wednesday by the Commerce Department.

New home sales declined by 2% from January to a seasonally-adjusted annual rate of 772,000. Analysts had been expecting a level of 810,000.

Meanwhile, the median price of a new home was $400,600, down from $427,400 in January.

The data also showed that the seasonally‐adjusted estimate of new houses for sale at the end of February was 407,000, representing a supply of 6.3 months at the current sales rate.

Oxford Economics said: “We expect new home sales to lose more momentum as we move further into 2022.

“Demand may remain strong, but high home prices and the spike in mortgage rates since the end of 2021 – the most rapid since 1994 – will price some buyers out of the market.”

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