New Home Sales Surge in January After Two Lame Months
New home sales jumped 35% in January after declining over the two previous months, according to a Mortgage Bankers Association survey of mortgage companies owned by homebuilders.
Based on the survey results, the MBA estimates builders sold 38,000 new homes in January, up from 28,000 in December. This jump indicates strong pent-up demand for new homes and bodes well for the spring selling season that starts shortly after the Super Bowl in some parts of the country.
Pulte Group’s top executive Richard Dugas recently told investors that homebuyer interest began to stir much earlier this winter than usual and he is optimistic about the spring selling season.
“There was a noticeable shift in the market in December,” which normally doesn’t happen until late January, Dugas said. The Bloomfield Hills, Mich.-based homebuilder has a mortgage banking subsidiary.
MBA chief economist Mike Fratantoni noted the builder survey seems to conflict with existing home sales data, which have been weak lately.
“Our builder application survey estimate is consistent with reports of homebuilder sentiment that show strength in the market for new homes,” Fratantoni said. “It is also worth noting that the significant January increase also followed a particularly slow pace in November and December.”
On a seasonally adjusted annual rate, the MBA estimates sales of new single-family homes were running at a 543,000 pace in January, up from a 402,000 pace in December.
The Census Bureau will issue its January new home sales report on Feb. 26.