Single-family new-home sales surged in January to a five-and-a-half-year high, giving the industry new hope that the new-home sector isn't heading for a slowdown this spring after all.
New-home sales rose 9.6 percent to a seasonally adjusted annual rate of 468,000 units in January, the highest level since July 2008, the Commerce Department reports.
Regionally, new-home sales in the Northeast jumped 73.7 percent in January; 10.4 percent in the South; and 11 percent in the West. In the Midwest, however, a cold snap was blamed for causing new-home sales to slip 17.2 percent.
"The fact that the cold weather that hit much of the country didn't stop home buyers from going out and purchasing a piece of the American dream is a great sign," says Kevin Kelly, chairman of the National Association of Home Builders. "However, the very low supply of new homes on the market and the continued concern of available buildable lots still have builders cautious about getting ahead of themselves."
The inventory of new homes for sale held mostly steady in January, remaining at a tight 4.7-month supply at the current sales pace. Last month, housing starts had posted their largest decline in nearly three years, sparking concern that the new-home sector was headed for a downward spiral with rising mortgage rates and home prices.
But in January, new-home sales increased 2.2 percent from a year ago, and the median price of a new home rose 3.4 percent to $260,100 compared to year-ago levels. The pace of home-price rises has slowed in recent months, the Commerce Department notes. --Courtesy of RealtorMag.com