Contracts for new, single-family home sales increased 7.9% in January to a 764,000 seasonally adjusted annual rate according to estimates from the joint release of HUD and the Census Bureau. The increase came off an upwardly revised December estimate, which was revised from an initial reading of 694,000 to a new estimate of 708,000. Year-over-year, the January estimate is 18.6% higher than the same period in 2019. The three-month moving average for new home sales reached 721,000 in January, the strongest since September 2007. Sales were strong in January, supported by lower mortgage rates and historically low unemployment.

Regionally, new home sales were up 4.8% in the Northeast, 30.3% in Midwest, and 23.5% in the West, and down 4.4% in the South.

Compared to last month, inventory of new homes for sale increased 0.3% to 324,000 in January. Year-over-year, inventory of new homes for sale was 6.6% lower than a year ago (347,000). The current months’ supply fell to 5.1 in January, pointing to additional production gains.

Median new home sales price (price of a home in the middle of the distribution) rose 7.4% in January to $348,200 compared to December ($324,100) and 14.0% higher than a year ago ($305,400).

About 9% of newly built home sales are priced under $200,000 in January, compared to 11% last month and 9% one year ago. The number of new homes priced above $400,000 increased.

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