As interest rates climbed in February New home prices just fell to nearly a Three-year low and are now down by about 19% from the peak that was set back in October of 2022 also the number of completed houses In which home builders are trying to Sell right now just shot up to nearly a 14-year high this is based on my own Analysis of the US Census buroughs Data That was just announced on Monday March 25th and of course in today's video I'll Share all the details um one thing I Want to mention that I spent hours and Hours uh researching the latest data We're seeing right now regarding new Home sales and also inventory levels as Well at first look when looking at Support which I'll share with you guys It appears that there wasn't a lot of Changes that happened this February but Unpeeling the layers I found a lot of Issues and some cracks starting to form In our US housing market regarding new Home construction sales so if you guys Get any value at this video whatsoever Then please hit the like button of Course also consider subscribing as well If you guys haven't done so already and With that said let's begin today's video Because I have a lot to share here so This was announced on Monday March 25th Which is today at the time of feeling This video This is for sales and
Inventory numbers um from the US Census Buau as of February 2024 so scrolling down here a friendly Reminder this video just like my videos I make each every month for you guys Regarding this report is based on new Single family home sales so excluding Town Homes condos and apartments for Example they also Define a sale as a Deposit taken or a sales agreement Signed between a buyer and home builder So this is really acting more like a Pending home sale in the resale Market Of existing houses and this is not based On closed home sales so you write an Offer to the home builder they accept Your offer or you give them an deposit That's defined a as a sale in the report Here also this can occur prior to a Permit being issued so this can be a Dirt lot a house under construction or a Completed house as well so again I have So much to share here again just looking At report I uh was kind of looking at it Thinking gosh not a lot of changes um From a year ago and also compared to Years past but again unpeeling the Layers here some pretty big changes here Which I one of the reasons why I want to Share this with you guys so this first Table is houses that sold and also um Houses that are for sale or house Inventory these figures are seasonally Adjusted and also are in thousands of
Units so for example this February 662 Th000 was a seasonally adjusted annaly Rate of home sales Nationwide this was Flat compared to the previous month a Small decrease of. 3% uh but it did Increase by 5.9% compared to February of 2023 however it was a Miss regarding the Streets forecast though because the Forecast was calling for 675,000 uh sales whereas we only had 662 Th000 um also according to the National Association of home builders or the Nahb uh they reported about a week ago That the share of Builders offering some Form of incentives to home buyers for The month of February was at 60% so Approximately six of every 10 um Builders Nationwide are offering Incentives to home buyers as I mentioned In previous videos I'm a realtor here in The greater Sacramento area I've done a lot of neighborhood tours uh Especially new home construction for my Clients who find me on YouTube Believe It or Not um any case um what's more Normal than not is for Builders to offer A $110,000 closing cost credit to help pay For their out-of-pocket expenses and Buying a house and because of these Incentives that Builder Builders are Offering this is one of the reasons why Sales have been supported much different
Than the resale Market where we're not Seeing this same dynamic occur here so In any case I mention that because it's Pretty remarkable to see that sales Still decrease from the previous month Even though approximately 60% of Builders are still offering some form of Incentives to home buyers in my personal Opinion this decrease in sales again the Sales pace for February is due to three Main reasons so please comment below Your thoughts regarding this um in my Opinion we're seeing this decrease in Sales from January due to rates rising In February I'll share that with you Guys in a little bit because we had Three consecutive months of decreases on A monthly basis regarding average uh Mortgage rates and now in February also In March as well we're seeing increase In rates uh number two uh the decrease In sales also is due to a rise of Inventory levels as well I have a lot to Share regarding that on top of that We're seeing a mix in sales as well uh a Higher share of sales that sold for less Than $400,000 but a lower share of sales That sold for over 750,000 again I'll share that with you Guys here in a little bit um Also Regarding year-to-date Sales overall for the us we're up by 4.4% also a huge increase in the Northeast up by 40 some per uh year to
Date the Midwest surging by 30% and also The West up by 41% the south for Whatever reason is down 13.4% so real estate is local let's have A look at our good uncle Fred here Regarding um sales again more like a Pening home sale for new single family Houses so at 6620 uh for February this has more or Less been on a downward Trend especially Compared to uh December 2021 and the Peak which was set around um August of 2020 at 66200 this is below preco levels as well So like I mentioned one of the reasons Why in my opinion while we're seeing a Decrease in sales this January is Because of this right here uh rates were This is average rates according to Freddy Mac uh for a 30-year fix for People with great credit of course uh We're decreasing for three consecutive Months that was November through January So in January the average uh 30-year fix Rate that's the average rate for entire Month of January was at 6.64% then increased slightly in February to 6.78% again that's one of the reasons Why we're seeing decrease in sales this February let's also have a look at the Rise of inventory levels so there's Approximately 463,000
New single family houses for sale again This could be a dirt lot a home under Construction or a completed house as Well that's a small increase of 1.3% From January uh but a 5.9% rise from 12 Months ago now again not just looking at Month-to-month changes and year- ofe Changes that does not tell us the full Story here because looking at or looking At this data um I want to share this With you guys um this is actually a 16mon high so inventory levels um Rose To a 16mon high in Fe February and you See that right here February 463,000 the highest level we've seen Since October of 2022 this is also way above pre-co Levels so for example February 2020 only 328,000 houses uh for sale and also back In February of 2019 only 339,000 so not only do we have a supply Um increasing to a 16-month high but Also it's way above uh preco levels as Well let's also have a look at the month Supply because the month supply this February is at 8.4 months uh virtually Flat on a month-to-month basis and also Flat from one year ago uh to provide Some context here a month supply for new Home construction a more normal range is In the range of 4 to 6 months so we're Still way above long-term averages we're Still below the all-time record high That was set way back in January 2009
When the month supply was a whopping 12.2 months but we also much higher Compared to the all-time record lows That was set back in August of 2020 when The month supply was only at 3.3 months Okay let's change gears uh slightly here And talk about home prices very big Changes here definitely pay attention Here because um the numbers here are Going down but again keep in mind that Builders overall are more likely than Not offering incentives to home buyers But prices are still going down so the Median sold price this February was just Over $400,000 one year ago this time it was At $433,500 So the US median sold price is down by 8% on your your basis on top of that at $400,500 this February that's the lowest Levels since June of 2021 in other words nearly a threeyear Low on top of that the all-time record Highs was set back in October of 2022 when the meeting us home so price Was at $497,000 this is wild right because the Peak back in October 2022 was approximately $997,000 higher than this February so Again overall yearv year down by 8% and Also down by about 19% from the peak That was set back in October of 2022
Let's take a look at a good uncle Fred Here 400,000 this February has been Going down ever since really November of 2022 uh but at 400,000 approximately This is the lowest levels we've seen Going back to June of 2021 uh when the median St price sold This is based on contracts being signed Was approximately $375,000 remember when I said part of The reason why we're seeing a decrease In prices is due to decreasing demand Because we have 7% rates but also due to The fact we have a rise of inventory Levels but also due to the mix in sales This February as well well compared to February of 2023 and that is this right Here this is a percent of sales um by Each of these price ranges here so we Have a higher share of houses that sold Um for less than $400,000 so for example in the range of 200 to about 300,000 one year ago 11% of All sales occurred in that price range But this February that increased to 16% Also in the range of 300,000 to 400,000 It went from 30% of all sales to 34% so A higher share of houses that sold in um In the range of less than 400,000 in Contrast we saw a lower share of houses That sold in the upper range in the Range of 500,000 to 749000 that was at 29% a year ago now It's only 22% also check this out
Because this is a metric I have been Important to you guys for probably over A year and I've been telling you guys This is a metric we should closely Follow this is the amount of houses that Are for sale in which the house is Already completed in which the home Builder needs to get sold just think of This way the house is already built they Just need a buyer to purchase it and Move in much different compared to a Sale of a dirt lot in which the home Builder is not going to completed for 6 To 12 months so there's a lot of costs Associated with building the house and Because of this when looking at Completed houses in which Builders Cannot sell that is a red flag that is This right here houses for sale again uh 463,000 right there but completed houses 885,000 I compare that to 69,000 one year ago so there's 85,000 Completed houses that are for sale that Have not been sold this is an increase Of 23% from 12 months ago also it's much Higher compared to preco levels as well And on top of that this is actually the Highest number of um completed houses For sale that we've seen since September Of 2010 in other words completed houses for Sale nearly a 14 year high for Comparison's sake the all-time record
High though that was set back in September of 2007 was a whopping 194,000 completed houses for sale on a National level let's take a look at our Good uncle Fred regarding this because This is again something we should Closely monitor which I'm not seeing Anyone else really talk about this very Much but 85,000 uh this is um higher than pre Covid levels so for example February 2020 77,000 February let's look at 2019 February 2019 we were at only 74,000 so at 85,000 right now much Higher compared to preco levels on top Of that this is actually the highest Level we've seen going back to September Of 2010 I will definitely keep a post Regarding this because this trend Continues where completed house for sale Keep on Rising and this is actually Rising pretty quickly here uh this would Be a recipe for disaster for home Builders in which they're building Houses but they're not able to sell them And keep in mind this is on top of the Fact that overall Builders are offering Incentives and home sold prices just Decreased to nearly a three-year low as Well and with that said please comment Below your biggest takeaways from
Today's video also if you guys got any Value out this video whatsoever then Please a like button great appreciate That for appreciate you hope you guys Have an awesome day look forward to Seeing you on the next [Music] [Music] Video
