New-home sales rise to highest level since ‘07

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.

More in Herald Business Journal

Health-care consumers need to take the lead, so get smart

David Russian, CEO of Western Washington Medical Group, writes our third essay about fixing health care.

More business, more competition for Everett kidney dialysis center

Nonprofit Puget Sound Kidney Centers sees large for-profit competitors enter state market.

Molina Medical holds fall carnival for families in Everett

Molina Medical is hosting a free event for families in the Everett… Continue reading

Leadership Snohomish County celebrates 20 years of service

Leadership Snohomish County is celebrating its 20th anniversary. The organization was launched… Continue reading

Snohomish, Monroe manufacturers honored for innovation, excellence

Two Snohomish County companies have been honored with Manufacturing Excellence awards at… Continue reading

Remodeled home tours planned this weekend

This weekend, Edmonds-based Chermak Construction will participate in the 2017 Remodeled Homes… Continue reading

Barron Heating to celebrate anniversary at Marysville showroom

Barron Heating and Air Conditioning is celebrating its 45th anniversary from 10… Continue reading

Robots on Wall Street: Slow-footed regulators lose ground

Watchdogs have to figure out how to check computers running lightening-fast algorithms.

US budget deficit hits $666B, an $80B spike for the year

The deficit issue has largely fallen in prominence in Washington in recent years.

Most Read