Sales of new homes fell for a third straight month and the supply swelled to the highest since 2009, suggesting that surging prices are increasingly deterring buyers, according to government data released Friday.
Single-family home sales fell 0.6% month-over-month to a 618,000 annualized pace (the estimate was 620,000) after a 622,000 rate (revised from 593,000). The median sales price increased 9.7% year-over-year to $326,800. The supply of homes at the current sales rate rose to 5.9 months, the highest since August, from 5.8 months.
The data point to a general cooling of the new-homes market. At the same time, the upward revision to January's figure means the market was probably better overall in the first two months of the year than analysts had anticipated.
Steady hiring and elevated consumer confidence are expected to support demand for housing. Meanwhile, borrowing costs are picking up and property-price appreciation continues to outpace wage growth. That's crimping affordability, especially for younger residents and first-time buyers.
The report contrasts with figures earlier this week showing existing-home sales rebounded in February despite tight inventory.
New-home sales, tabulated when contracts get signed, account for about 10% of the market. While volatile, they're considered a timelier barometer than purchases of previously owned homes, which are calculated when contracts close and are reported by the National Association of Realtors.
Purchases rose in two of four U.S. regions, including a 9% gain in the biggest region, the South. Sales fell 17.6% in second-largest region, the West. The number of properties sold in which construction hadn't yet started rose to an annual pace of 188,000 last month from 152,000, a sign that developers will stay busy in the coming months.
The report was released jointly by the Census Bureau and Department of Housing and Urban Development.