New Home Sales drop 6.9%, Indicating Sluggish U.S. Housing Market at the start of 2019

Sales of new homes in the U.S. fell short of expectation as it dropped 6.9% MoM and 4.1% YoY in Jan 2019. New homes sold at a seasonally adjusted annual rate of 607,000 units down from 652,000 units in Dec 2018. The sales in the south part of the country which accounts bulk of the transaction,  tumbled 15.1%, northeast and midwest experienced drop 11.4% and 28.6% respectively, whereas the west reported a gain of 27.8%.

The median sales price of new home also fell 3.76% YoY, indicating the sluggish real estate market. Most analysts believe that the housing market in the US is likely to remain so through the first half of 2019 as the inventory will take around 6.6 months to clear. However, recent decline in mortgage rate and strong job market are expected to support the housing demand in coming months.