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Updated: U.S. New Home Sales Rise To 468K In January

By Kitco News
Wednesday February 26, 2014 10:00 AM

Editor's Note: The article was updated to include comments from CIBC.

(Kitco News) - Bucking the current trend in the U.S. housing market, there was a sharp increase in the purchase of new homes, according to data from the Department of Commerce and Department of Housing and Urban Development.

On Wednesday, the Commerce Department said sales of new single-family houses rose to a seasonal adjusted annual rate of 468,000 in January. According to the report, this is a increase of 9.6% from December’s revise rate of 427,000 sales. According media sites, economists were forecasting an annual rate around 400,000.

The report also said that last month’s sales was a 2.2% increase from the January 2013 annual rate of 458,000.

"The median sales price of new houses sold in January 2014 was $260,100; the average sales price was $322,800. The seasonally adjusted estimate of new houses for sale at the end of January was 184,000. This represents a supply of 4.7 months at the current sales rate," the report said.

The surprising strength in new home sales shows that the sector isn’t in as bad a shape as first thought, said Avery Shenfeld, senior economist at CIBC World Markets. Shenfeld added that the strong pace of sales should “trigger a nice rebound in starts.”

He said the report is “a sign that our optimism on housing as a driver of U.S. growth is still on track, but we’ll get a clearer picture this spring when weather effects drop out.”

In contrast, Last Friday, the National Association of Realtors said existing home sales dropped 5.1% in January to a seasonally adjusted annual rate of 4.62 million. The association said January was the slowest pace of sales since July 2012.

Along with the sales data, home prices appear to be retaining their value, but some analysts said that could soon change. The association said that the median home price hit $188,900, an increase of more than 10% from the previous year.

On Tuesday, data from S&P and Case-Shiller showed that in December home values in the 10 and 20 largest U.S. cities expanded by an annual rate of 13.6% and 13.4%, respectively.

David Blitzer, chairman of the index committee at S&P Dow Jones Indices, said that December's data was the best end-of-year since 2005; however, he added that gains are slowing on a month-to-month basis.

By Neils Christensen of Kitco News; nchristensen@kitco.com

 

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
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