Sales of newly-built, single-family homes declined by less than one percent in January from an upwardly revised number in the previous month to hit a seasonally adjusted annual pace of 321,000 units, according to data jointly released by the U.S. Department of Housing & Urban Development (HUD) and the U.S. Department of Commerce. "Outside of the upwardly revised December number, this is actually the best sales pace we've seen since April of 2010, when the homebuyer tax credit was in effect," said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla. "Moreover, many recent indicators—from our builder confidence surveys to housing starts and permits data and the expanding list of improving local markets—have provided evidence that consumers are becoming more confident about making a home purchase."
New-home sales slipped 0.9 percent to a seasonally adjusted annual rate of 321,000 units in January, which was the second-fastest pace of sales activity since April of 2010. This decline was due to a 24.5 percent reduction in the Midwest and a 10.6 percent reduction in the West. Meanwhile, the Northeast posted an 11.1 percent gain and the South bounced back from a substantial decline in the previous month with a 9.3 percent increase.
"New-home sales this January were up 3.5 percent from the same time last year, and up one percent from the fourth quarter average for 2011," said NAHB Chief Economist David Crowe. "This is indicative of the incremental, steady progress that the market is making toward recovery in conjunction with modest economic and job growth. Increasingly, potential buyers are feeling better about their financial situation and their ability to buy a home, but the challenges posed by tight credit conditions and appraisal issues continue to slow that process."
The inventory of new homes for sale continued to shrink to another record low in January, hitting 151,000 units, or a 5.6-month supply at the current sales pace.
