What happened: The pace of sales of newly-constructed homes in February was the highest since last March. It easily beat the MarketWatch consensus of a 625,000 annual pace, but downward revisions to prior months were hefty.
At the current sales rate, it would take 6.1 months to exhaust the available supply of homes. Over many decades, 6 months of supply has been the amount that’s generally considered a sign of a market evenly balanced between supply and demand.
The median price of a home sold during the month was $315,300, about 4% lower than at the same time last year.
The government’s home-construction reports are based on small samples, and are often revised heavily, making it hard to rely on any one month’s data for a complete picture of the housing market. For the year to date, sales were 2.8% higher than during the same period last year.
Read: Mortgage rates plunge at the fastest pace in a decade as growth fears resurface
Big picture: Since the housing crisis of a decade ago, it’s been hard for home builders to get back into a groove. They’ve struggled to balance secular, long-term headwinds with the fallout from the housing bust, and to meet customers at the price points they can afford. That’s kept conditions in the industry choppy.
Through the noise, however, there’s been steady — and growing — customer demand for new homes. The average existing home in America is 37 years old, according to an analysis by the National Association of Home Builders. And many current homeowners aren’t willing or able to sell their properties.
See: Why aren’t there enough houses to buy?
Market reaction: Those choppy industry conditions have made for a roller coaster ride for investors in the big builders. The iShares U.S. Home Construction ETF ITB, +0.20% gained 36% over the course of 2017, lost 46% during 2018, and is up 18% in the year to date.
The Dow Jones Industrial Average DJIA, +0.47% rose on Friday.
Related: Housing market is tipping in favor of buyers, real-estate agents say