In January, new home sales fell 8% on an annual basis, declining the most in western housing markets, according to the latest data from Redfin.
“The trend in new residential sales over the past few months has been similar to that of home sales overall, which fell 7.6% year over year in January, the sixth consecutive month of declines,” Redfin writes.
Notably, across the country, sales of new single-family homes retreated 0.2% on a month-over-month basis,” according to the company’s data.
“The shrinking size of sales declines, paired with falling interest rates, may be helping to improve builder confidence, which has been on the rise since December,” Redfin Chief Economist Daryl Fairweather said. “Still, buyers understand that the market is shifting in their favor and have become more sensitive to high home prices. That added sensitivity could continue to put a damper on the sales of new homes, which tend to be more expensive than comparable existing ones.”
In fact, RE/MAX’s latest National Housing Report revealed that in January, home sales declined for the sixth consecutive month, leading to the largest inventory increase in 10 years.
“The winter chill extended to the housing market in January, as home sales remained cool," RE/MAX CEO Adam Contos said. "The good news is that inventory levels in January continued to rise on a year-over-year basis, providing incremental improvement in what's been a multi-year shortage of for-sale homes. This is a positive for homebuyers, as the market continues to swing their way.”
According to Redfin, the South experienced the least declines in new home sales, retreating only 4.7%. However, the West led the pack with a whopping 16.5% decline in new home sales.
This is on par with data from LendingTree’s migration report, which suggests more and more Americans are leaving West Coast markets and heading South to purchase homes. You can read more about it here.
The image below highlights the year-over year changes for each region in January:
(Click to enlarge; image courtesy of Redfin)
NOTE: Redfin's data is based on more than 150 U.S. markets and represents year-over-year growth.