U.S. new-home sales eased in February

New-home sales in the U.S. unexpectedly fell in February for the first time in three months, suggesting an uneven recovery for the housing market.

Purchases of new single-family homes decreased 0.3% to a 662,000 annual pace last month, government data showed Monday. The median forecast of economists in a Bloomberg survey called for a rate of 677,000.

Despite the drop in February, the U.S. housing market has shown signs of a sustained comeback as mortgage rates stabilize around 7% and builders offer various incentives amid a limited listings of previously owned properties.

A solid job market has also powered orders growth at builders including KBHome and Lennar Corp., suggesting residential investment will contribute to economic growth.

“Buyers have largely adjusted to the rate environment and we are encouraged by the demand we’re seeing that the onset of the spring selling season,” Jeffrey Mezger, KBHome’s chief executive officer, said on the company’s recent earnings call.

The Commerce Department’s report also showed the median sales price of a new house decreased 7.6% from a year ago to $400,500 in February. The supply of new homes rose to 463,000 during the month, the highest since October 2022.

By region, purchases decreased in the Northeast and Midwest. They rose 3.7% in the South, the biggest region, while they increased in the West to the highest level since July.

While a lack of previously-owned homes for sale has been a boon to builders, it’s been a detriment to Realtors unable to find properties to list. However, a report last week showing the strongest existing-home sales in a year last month and an uptick in inventory suggested a nascent recovery in the resale market.

Meanwhile, housing starts bounced back from a weak start to the year with the biggest gain since May.