Sales of New U.S. Homes in January Were Slower Than ForecastBy
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 percent to a 555,000 annualized pace, Commerce Department data showed Friday. 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 535,000 pace from a previously estimated 536,000.
The agency said there was 90 percent confidence that the change in purchases last month ranged from a 14.8 percent drop to a 22.2 percent increase, underscoring the volatility of the data.
Home sales rose in three of four regions. Demand was held back by a 4.4 percent 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 percent from January 2016 to $312,900.
New-home sales, which account for about 10 percent 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 Wednesday. 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 policy makers will keep raising interest rates this year.
The average rate on a 30-year fixed mortgage was at 4.16 percent in the week ended Feb. 23, according to Freddie Mac figures. That’s up from 3.54 percent in early November.
— With assistance by Chris Middleton