Mar 29 2005
Sales of new single-family homes shook off a weather-related downturn in January as the February sales pace increased 9.4 percent to a seasonally adjusted annual rate of 1.226 million units, the U.S. Commerce Department reported today.
“Builders expected single-family home sales to remain strong,” said David Wilson president of the National Association of Home Builders (NAHB) and a custom home builder from Ketchum, Idaho. “In our regular monthly survey of single-family home builders, they indicated that they were solidly optimistic about the coming months, and today’s Commerce Department figures reinforce that optimism.”
“We expected a late-winter rebound,” said NAHB Chief Economist David Seiders. “Demand still outstrips supply in many areas, and buyer demand continues to be driven by favorable market fundamentalsm, growing employment and household income, new household formations and historically low mortgage rates. “Even though mortgage rates have moved up in recent weeks, financing conditions remain quite favorable, and the drive toward homeownership remains strong. People want to live in their own homes, and they regard homeownership as a solid investment, as well,” Seiders added.
Home sales were up in all regions for the month. The sales pace in the Northeast increased 20.3 percent and was up in the Midwest by 9.9 percent. Sales in the South rose by 9.0 percent, and in the West climbed by 7.4 percent. The inventory of new homes for sale was 444,000, a 4.4 months’ supply at the February sales pace.
“The inventory situation is very manageable. It includes a large number of units permitted but not yet started, which is not a problem for builders,” Seiders said.