WASHINGTON: Sales of new US single-family homes surged to a 5-1/2-year high in January, possibly easing concerns of a sharp slowdown in the housing market. The Commerce Department said yesterday that sales jumped 9.6 percent to a seasonally adjusted annual rate of 468,000 units, the highest level since July 2008.
December’s sales were revised up to a 427,000-unit pace from the previously reported 414,000-unit rate. Sales in the Northeast soared 73.7 percent to a seven-month high, while the South recorded a 10.4 percent rise in transactions to a more than five-year high. These regions along with the Midwest have experienced unusually cold weather that has been blamed for holding back economic activity. Sales tumbled 17.2 percent in the Midwest last month, while rising 11 percent in the West.
New homes are a small segment of the housing market, which lost momentum in the second half of last year following a run-up in mortgage rates and a shortage of properties for sale.
Higher borrowing costs and home prices mean that properties are less affordable for many, especially as income growth remains tepid. Yields on 10-year and 30-year Treasuries rose after the release of the housing data, while US stocks were trading broadly higher.
A separate report showed applications for loans to purchase homes fell four percent last week from a week earlier, hitting their lowest level since 1995.
Sales of previously-owned homes tumbled to a 1-1/2 year low in January and housing starts recorded their biggest decline in nearly three years last month, according to data last week. That raised concerns that the sector, which is key to the economy’s recovery, was slowing down sharply.
Reuters
