New Home Sales Soar in January
Mar. 03, 1998
WASHINGTON (AP) _ Sales of new homes soared 10.3 percent in January, the biggest increase in more than four years, as buyers flocked to take advantage of mortgage rates dipping below 7 percent.
New single-family homes sold at a seasonally adjusted annual rate of 877,000, the second-highest level on record, the Commerce Department said today.
The increase, from a rate of 795,000 in December, was the most since September 1993. The level matched November's and was exceeded, in records stretching back to 1963, only by the 880,000 rate in March 1986.
January's brisk sales rate, powered by double-digit gains in the West and South, provided a fast start for builders in 1998. Nevertheless, economists don't expect the year to quite live up to 1997, when a 19-year high of 803,000 homes were sold.
Mortgage rates are expected to edge higher later in the year. In January, they dipped to four-year lows as investors pulled money from troubled Asian economies and poured it into the relative safety of U.S. financial markets.
January sales also may have been helped in many parts of the country by El Nino, which has caused flooding and mud slides in California but given much of the rest of the nation an unusually mild winter.
Regionally, new home sales skyrocketed 19 percent in the West to an annual rate of 238,000 and 13.1 percent in the South to a rate of 405,000. They edged down 1.4 percent in the Northeast to a rate of 72,000 and 1.2 percent in the Midwest to 162,000.
The big increase in sales left 282,000 new homes available for sale at the end of the month. That's a 3.9-month supply at the current sales rate. That ties the record set in November.
The median price of a new home, meaning half sold for more and half for less, was $148,000 in January, up 2.1 percent from a year ago.