US homebuyers spike demand for new homes to 13 year high

Sales of newly-built single-family homes in the US increased 7.9% in January to a seasonally adjusted annual rate of 764,000.

The gain is more impressive given that the HUD and Commerce Department upwardly-revised the December figure. On a year-over-year basis, sales were up 18.6% to the highest monthly pace since July 2007.

Earlier this week, stats on US existing home sales showed a decline in sales.

New home sales gained the most in the Midwest (up 30.3%) followed by the West (up 23.5%) and the Northeast (up 4.8%). The South saw a decrease of 4.4%.

“Warm weather in many parts of the U.S. meant an early start to the home buying season,” said Jing Fu, NAHB director of forecasting and analysis. “Meanwhile, the months’ supply has fallen to 5.1, indicating additional housing inventory is needed.”

The inventory decrease of 6.6% year-over-year to 324,000 included 76,000 which are ready to occupy.

The median sales price was $348,200. The median price of a new home sale a year earlier was $305,400.

“The January sales pace matches what builders are saying in NAHB surveys—builder confidence is strong and low interest rates have fueled single-family housing demand at the start of 2020,” said Dean Mon, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Shrewsbury, N.J.