Sales of new homes plunged 18.2% in February as severe winter weather in many parts of the country and a lack of supply took a toll on the housing industry.
Sales of single-family homes dropped to a seasonally adjusted annual rate of 775,000 last month, the Commerce Department reported Tuesday, the slowest sales pace since May of last year.
Every region of the country experienced a drop-off in sales.
The median price of a new home sold in February was $349,400, up 5.3% from a year ago.
The same weather disruption was evident in the existing homes market, for which the U.S. released data Monday. Those sales declined 6.5% last month.
The report Tuesday marked the first decline in sales of new homes in two months. Housing continues to be one of the few bright spots during the coronavirus pandemic. New home sales last year advanced to levels not seen since the housing boom of the mid-2000s.
Despite the hiccup, economists don’t believe even skyrocketing prices will cool the U.S. housing market. High lumber costs, rising mortgage rates, though they remain near record lows, along with few properties available for sale, are pushing home ownership out of range for many.
“Home sales are still higher than a year earlier, and given the increased pace of building, new home sales should boom again this spring,” said Robert Frick, corporate economist at Navy Federal Credit Union.
For February, sales fell in every part of the country, led by a 37.5% drop in the Midwest and a 16.4% fall in the West. Sales declines 14.7% in the South and were down 11.6% in the Northeast.