Report: New Home Sales Jump 15.6% in January
Monthly sales reach their highest level since July 2008 while inventory remains low.
Sales of newly built, single-family homes rose 15.6 percent to a seasonally adjusted annual rate of 437,000 units in January, according to figures released today by the Department of Housing and Urban Development and the U.S. Census Bureau. Those sales mark the highest monthly total since July of 2008 — just before the economy plunged into recession.
Officials from the National Association of Home Builders (NAHB) declared the figures proof that the housing market is regaining its health.
“The surge in demand for new homes this January is an excellent sign that the housing recovery is gaining steam and helping put more people back to work,” said NAHB Chairman Rick Judson. “While we can’t expect to see double-digit sales growth every month, consumers are definitely coming off the fence as prices start to rise, and builders in some cases are having a tough time keeping up. Challenges related to credit availability, poor appraisals, dwindling lot supplies, spot shortages of skilled labor and rising materials costs are all weighing on the recovery process.”
The growth in the national housing market included national rate expansion in every regional sector of the U.S., including a 27.6 percent increase in the Northeast, an 11.1 percent gain in the Midwest, a 3.2 percent gain in the South and a 45.3 percent gain in the West.
Despite the encouraging sales figures, the low surplus of new homes for sale fell to an eight-year low.
“Today’s report shows a strong revival in new-home sales across all regions of the country and bodes well for the upcoming spring buying season,” said NAHB Chief Economist David Crowe. “That said, the razor-thin supply of new homes for sale is very concerning at a time when we are only about half-way back to what could be considered a ‘normal’ level of activity. Builders need to be able to refresh their inventories to keep the momentum going.”
The inventory of new homes for sale held unchanged at a relatively meager 150,000 units in January. This amounts to a 4.1 months’ supply at the current sales pace, the smallest months’ supply since March of 2005.
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