New Home Sales dropped last month by 11% and hit the lowest levels in the 47 years that the index has been tracked.
This is great news for current home shoppers. The housing market was rallying all year, pushing the home supply down to 7 months by last October. Supply was down, demand was up, and the best deals on homes were all turning into multiple offer situations in many markets.
We’re seeing continued general strength in the housing market, but last month’s data revealed a brief pause. Additional supply should lead to better negotiating power for buyers and more favorable terms on items like closing costs concessions and free upgrades from builders.
The reasons for the spike in supply are varied:
- The original home buyer tax credit expired in November
- Weather conditions were awful in most of the country in January
- Weak employment and consumer confidence continue to hinder big ticket sales
The is all a matter of timing. This data is over a month old now. Market conditions in the street today determine the price you’ll get today. Still, this is great timing for people making offers in the very short term. Next month’s report will likely look a little better.
With the tax credit expiring, FHA interest rates rallying, and a generally improving housing market, it looks like a great time to buy.
Tags: home buyer, Home Supplies, housing market, New Home Sales