• There were 801,000 new home sales nationwide in January (SAAR), down 4.5% from December and 19.3% from January 2021, according to the U.S. Census Bureau.
• The median sales price of new houses sold in January 2022 was $423,300.
• The seasonally‐adjusted estimate of new houses for sale at the end of January was 406,000, a supply of 6.1 months at the current sales rate.

The only-modest setback in new home sales reinforced the fact that both home shoppers and home builders continue to stand firm amid a slew of challenges. With the wind blowing against them, builders navigated significant supply chain and labor disruptions, including a very difficult past two months thanks to a wave of Covid infections sweeping the nation and contributing to lost man hours. And while pandemic-related pressures appear to be easing in other parts of the economy, the shortage of key building materials – notably windows and wood products – persists. Still, builders remain positive, with a key reading on builder sentiment suggesting optimism sits well above pre-pandemic levels. But these headwinds cannot be ignored and builders are still falling short of potential — last month’s figure was 19.3% below January 2021, which represented a post-Great Recession record high. With home prices rising at unprecedented rates, and existing home inventory now at the lowest levels on record — and demand expected to remain strong – prospective buyers are eagerly waiting for new homes to come onto the market even if it means having to wait for months, or even years, before construction is complete. Just 10% of new homes available for sale in January were fully built, slightly more than lows reached in the fall but still well below historic norms. If improvements to the supply chain are made and builders are able to keep pace with the recent high levels of new homes permitted – both big “ifs” – builders are well-positioned to put and keep themselves in home buyers’ good graces.