Sales of New US Homes in January Were Slower Than Forecast
Purchases of new U.S. homes in January were slower than forecast, signaling an increase in mortgage rates may be giving some potential buyers pause.
Sales climbed 3.7% to a 555,000 annualized pace, Commerce Department data showed Feb. 24. The median forecast in a Bloomberg survey of economists called for a 571,000 rate. Purchases in the previous three months were revised lower.
The figures indicate a more measured improvement in the housing market as buyers adjust to higher borrowing costs and prices. At the same time, steady income and job growth remain sources of support as the spring selling season approaches.
New-home sales estimates for January ranged from 540,000 to 600,000. The Commerce Department revised the December reading to a 535,000 pace from a previously estimated 536,000.
The agency said there was 90% confidence that the change in purchases last month ranged from a 14.8% drop to a 22.2% increase, underscoring the volatility of the data.
Home sales rose in three of four regions. Demand was held back by a 4.4% drop in the West.
The supply of homes held at 5.7 months in January. There were 265,000 new houses on the market at the end of the month, the most since July 2009.
The median sales price of a new house rose 7.5% from January 2016 to $312,900.
New-home sales, which account for about 10% of the residential market, are tabulated when contracts are signed. That makes them a timelier barometer than transactions on existing homes.
Sales of previously owned properties, tallied when contracts close, rose more than forecast in January to the highest level since February 2007, National Association of Realtors data showed Feb. 22. Inventory reported its 20th consecutive year-over-year decline.
Mortgage rates picked up since early November on speculation the economy will strengthen and Federal Reserve policymakers will keep raising interest rates this year.
The average rate on a 30-year fixed mortgage was at 4.16% in the week ended Feb. 23, according to Freddie Mac figures. That’s up from 3.54% in early November.
