US new home sales drop sharply in February

New home sales undershot economists' forecasts by an enormous margin last month.

According to the Department of Commerce, the annualised pace of new home sales in the US shrank by an outsized 18.2% month-on-month to reach 775,000.

Economists had penciled-in a slowdown from January's clip of 923,000 to 885,000.

Despite the drop, the pace of new home sales remained 8.2% above its year ago level.

The median price of a new home available for sale meanwhile fell from $353,200 to $349,400.

Falling new home sale in February pushed the housing inventory available to be sold from 3.8 months' worth of sales to 4.8 months.

Blerina Uruci and Pooja Sriram at Barclays Research highlighted how sales fell across all regions, especially in the Midwest and South.

Not coincidentally, that mimicked the pattern of snowfall seen during February's snowstorms.

"However, in spite of today's large drop overall, new home sales remain slightly above pre-pandemic levels," they added.

"In addition, we expect some of the sales lost because of inclement weather to be made up in the coming months and believe February's dramatic decline will likely be temporary."

They also noted that recent "robust" housing starts and higher home prices might bring more inventory into the market "in the coming months".