By Jeffry Bartash MarketWatch
WASHINGTON — Sales of newly constructed U.S. housing jumped almost 16 percent in January, hitting the highest level in 4½ years and offering strong evidence that the sector’s rebound trend is intact.
Sales of new homes rose to an annual rate of 437,000 last month from an upwardly revised 378,000 in December, marking the biggest one-month gain since 1993, the Commerce Department said Tuesday. The figures are seasonally adjusted.
The pace of sales easily blew past the 384,000 consensus estimate of the economists polled by MarketWatch.
Sales were 28.9 percent higher than the year before, though they still remained low by historical standards.
Economists expect sales and new construction to remain on an upward track through 2013 as the housing industry benefits from ultralow interest rates, an improved labor market and rising household formation.
A full recovery in the housing market, however, could take years. Sales of new homes in 2012 were below 400,000 for the fourth straight year. Before the housing market crashed in 2007, new-home sales had topped 1 million for four straight years, and they had never fallen below 400,000 in the years since the government first began keeping track in the early 1960s.
Yet two separate reports released Tuesday showed that home prices in December continued to move higher, suggesting that the cost of buying a home is likely to move up in the coming months.
Sales were strongest in the West, soaring 45.3 percent. That’s the region’s best performance since April 2008.
Sales of new homes also jumped 27.6 percent in the Northeast, perhaps aided by unseasonably warm winter weather in December that persisted into early January.
Sales rose a much smaller 3.2 percent in the South, which has accounted for more than half of all U.S. purchases over the past few years.
In the Midwest, sales climbed 11.1 percent.
Although builders are ramping up, they still don’t have that many new homes to sell after years of slowed construction. The supply of new homes available for purchase on the U.S. market dropped to 4.1 months at the current sales pace from 4.8 months in December, putting it at the lowest level since March 2005.