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Friday, February 27, 2015

January New Home Sales Maintain December Pace

According to estimates from the joint Census Bureau and HUD release, the January pace of new single-family home sales stood at a 481,000 seasonally adjusted annual rate. This was down a negligible 0.2% from the 482,000 pace for December, which marked the highest rate since the Great Recession.

Despite some analysts’ expectations of a monthly decline, the rate of new home sales in January maintained the gains reported in the December report. Combined with upward revisions, the effectively flat monthly change from December to January keeps new home sales near post-recession highs.
The January 2015 pace was 5.3% higher than the sales rate recorded in January 2014. Total inventory was 218,000 (seasonally adjusted), marking a 5.4 months’ supply at the current sales rate.
Because the monthly new home sales estimates possess a large statistical confidence interval, it is useful to gauge trends using a three-month moving average (the red line in the graph above). On that basis, new home sales have been trending upward since the middle of 2014.
This is consistent with the NAHB/Wells Fargo Housing Market Index, a measure of single-family builder confidence. The HMI has been in positive territory (above a level of 50) for the last eight months.


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