US new home sales jump in January as market boom continues
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New home sales surged again in January, according to government data Wednesday which showed the US housing market boom continues, making it one of a few sectors that have strengthened amid the pandemic.
Despite the sales increase prices dipped last month, but strong demand driven by historically low mortgage lending rates is keeping prices higher and the supply of available homes below the pre-pandemic levels, the data showed.
Sales of new homes last month jumped 4.3 percent compared to December, to 923,000 at a seasonally-adjusted annual rate -- the level sales would hit if the pace continues at the same rate for 12 months -- the Commerce Department reported.
After a brief pause in the early weeks of the Covid-19 shutdowns, homes sales took off nationwide, hitting 815,000 last year, more than 19 percent higher than in 2019 and the largest amount since 2006.
But homebuilders are struggling to keep up with demand -- in part due to supply and labor shortages -- and economists expect sales to slow this year.
The supply of available homes dipped slightly in January to 4.0 months, but the median sales prices eased to $346,400, without seasonal adjustment, the Commerce Department said.
While "sales surprised to the strong side in January," Nancy Vanden Houten of Oxford Economics said in an analysis, "Our forecast is for new home sales to moderate ... as rising home prices and a recent backup in mortgage rates price some buyers out of the market."
Sales growth last month was largest in the Midwest, while the Northeast declined nearly 14 percent, the report said.
Chuck Fowke, chairman of the National Association of Home Builders (NAHB) warned that "rising affordability issues are looming this year, particularly increasing building material costs, including lumber, which is adding $24,000 to the price of a typical newly-built home."
© 2021 AFP