Sales of newly built, single-family homes rose 15.6 percent to a seasonally adjusted annual rate of 437,000 units in January, according to newly released figures from HUD and the U.S. Census Bureau. Amidst this quickened sales pace--the fastest since July 2008--the months' supply of new homes for sale fell to its lowest level in nearly eight years.
The latest report "shows a strong revival in new-home sales across all regions of the country and bodes well for the upcoming spring buying season," noted NAHB chief economist David Crowe. "That said, the razor-thin supply of new homes for sale is very concerning at a time when we are only about half-way back to what could be considered a 'normal' level of activity. Builders need to be able to refresh their inventories to keep the momentum going."
New-home sales posted solid gains across every region in January, including a 27.6 percent increase in the Northeast, an 11.1 percent gain in the Midwest, a 3.2 percent gain in the South, and a 45.3 percent gain in the West.
The inventory of new homes for sale held unchanged at a relatively meager 150,000 units in January. This amounts to a 4.1 months' supply at the current sales pace--the smallest months' supply since March of 2005.