New Home Sales Rocket Beyond Expectations

Homebuilder in hardhat.
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Sales of new homes soared in January to a blistering seasonally adjusted annualized rate of 923,000, the Commerce Department said Wednesday.

That puts sales 4.3 percent above the revised December rate of 885,000 and 19.3 percent above the January 2020 estimate.

The median forecast called for an 856,000 pace.

The median sales price jumped 5.3 percent from a year earlier to $346,400 from a year earlier. That is the highest for any January on record. The average sales price was $408,800, also a record high.

The seasonally-adjusted estimate of new houses for sale at the end of January was 307,000. This represents a supply of 4.0 months at the current sales rate.

Extremely low mortgage rates and a surge in demand for single-family homes lifted the residential real estate market last year.

New homes account for about 14 percent of the housing market. But because homebuilding is labor-intensive and new homes need to be outfitted with consumer goods—such as washing machines, refrigerators, and dishwashers—the category punches above its weight-class when it comes to the broader economy.

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