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New Home Sales Rise in January
Strong Market Predicted in Months Ahead


After declining 7.0 percent in December, sales of new single-family homes rebounded in January with a modest increase. Sales for November and October were revised down and possibly reflect an increase in cancellations because of rising mortgage rates, the Wells Fargo Economics Group said of a Census Bureau report.

New single-family home sales in January, at a seasonally adjusted rate of 555,000 units, were 3.7 percent higher than December, and 5.5 percent above the pace in January 2016, according to a Census Bureau report.

Solid builder confidence -- as measured by the National Association of Home Builders' Housing Market Index, which stood at 65 in February -- and ongoing tight inventory conditions suggest the single-family homebuilding market will remain strong in the months ahead, said Robert Dietz, chief economist for the NAHB.

"An open question is pricing, given rising construction prices and increasing interest rates," Dietz said. "New homes will need to be competitively priced, even as prices for existing homes continue to grow. For this reason, we continue to expect a broadening of the new home inventory base and slight declines in median new home size."

The median sales price of new houses sold in January was $312,900, and the average sales price was $360,900, the Census Bureau reports. A new-home sales report for February will be released March 23.

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July 21, 2019, 1:20 pm PDT

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