U.S. New Home Market Sees Positive Growth In January 2022

Mar. 09, 2022 6:24 AM ETITB, XHB, NAIL, HOMZ, PKB, IYR, REZ, REM, RWR, VNQ, ICF, FRI, PSR, JRE, KBWY, SCHH, ROOF, MORT, REET, FREL, SRET, EWRE, XLRE, USRT, NURE, PPTY, SRVR, INDS, BBRE, NETL, RDOG, IVRA, REIT, FPRO

Summary

  • The U.S. new home market showed signs of a rebound in January 2022. The market capitalization for American homebuilders ticked up for the month over a potential bottom of 2021's downtrend in December.
  • With both new home sales and prices rising in January 2022, the market cap for the U.S. new home market ticked upward, breaking its year-long downtrend and moving into positive growth.
  • The question now becomes how long can that last with new homes becoming less affordable for the typical American household.

Daughter on father"s shoulders in front of suburban home

MoMo Productions/DigitalVision via Getty Images

The U.S. new home market showed signs of a rebound in January 2022. The market capitalization for American homebuilders ticked up for the month over a potential bottom of 2021's downtrend in December. Political Calculations' initial estimate of the overall market capitalization of the U.S. new home market for January 2022 was $27.53 billion, an increase of 0.5% from December 2021's revised estimate of $27.38 billion.

Trailing Twelve Month Average New Home Sales Market Capitalizaton in the United States, January 1976 - January 2022

U.S. Census Bureau, U.S. BLS, Author

The increase in the market cap for new homes was driven by two factors. First, the number of new home sales rose, continuing the increase in sales that began after November 2021. Second, the average sale price jumped higher, as 2021's rising trend for new home prices reasserted itself.

The following two charts visualize the trailing twelve month averages of the U.S. new home market's underlying annualized sales and average price data.

New home sales continued increasing:

Trailing Twelve Month Average of the Annualized Number of New Homes Sold in the U.S., January 1976 - January 2022

U.S. Census Bureau, Author

New home prices resumed rising:

Trailing Twelve Month Average of the Mean Sale Price of New Homes Sold in the U.S., January 1976 - January 2022

U.S. Census Bureau, Author

With both new home sales and prices rising in January 2022, the market cap for the U.S. new home market ticked upward, breaking its year-long downtrend and moving into positive growth. The question now becomes how long can that last with new homes becoming less affordable for the typical American household.

Original Post

Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.

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