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Tuesday, February 26, 2013

New Home Sales Begin the New Year

New home sales surged 15.6 percent in January to a 437,000-unit pace. Sales for the prior month were also revised higher. Home prices moderated during the month, reflecting a shift in composition of homes sold.

New Home Sales Surge in January January’s surge in new home sales should allay fears that the housing recovery is losing momentum. Sales jumped 15.6 percent to a 437,000-unit annualized pace, marking the highest level since July 2008. With sales rising and construction of single-family homes still lagging, the supply of homes available for sale fell to just 4.1 months, which is the lowest since March 2005 –nearly 8 years!

With Sales Up, Why is Builder Confidence Sagging? The NAHB/Wells Fargo Home Builders’ Index fell one point in February and has stalled just below the key 50 breakeven level. Builders remain relatively upbeat about future sales but concerned about buyer traffic. Regional builders and custom home builders may also be expressing some frustration with rising land costs, material prices and tight labor supplies. Home prices moderated in January, but remain up year to year.

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