No Spring Slowdown for New-Home Sales
In January, single family new-home sales surged to a five and a half year high, which is giving hope that the new-home sector isn’t going to slow down in Spring after all.
New-home sales role 9.6% to a seasonally adjusted annual rate of 468,000 units in January. That is the highest it’s been since January 2008.
Throughout the U.S. in January, new-home sales rose 73.7% in the Northeast, 10.4% in the South, and 11% in the West. However, due to a cold snap throughout the Midwest, new-sales slipped 17.2% there.
Kevin Kelly, a chairman for the National Association of Realtors commented that, “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. 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 new homes for sale inventory generally remained steady throughout January, staying at a tight 4.7 month supply at the current sales pace. Housing starts had posted their largest decline in nearly three years last month, which gave concern about that the new-home sector was going to hit a downward spiral between rising home prices and mortgage rates.
However, in January, new-home sales rose 2.2% from last January, and the average price of a new home rose to $260,100, a 3.4% increase from last year. The pace of rising home prices has also slowed in the past few months.