Palm State Mortgage Company announces: January statistics have proven that new home sales are on the rise! If you are the member of a family who bought a new home in January 2014, you are celebrating with about 468,000 other Americans who bought their new homes in the first month of the New Year.
This statistic is a small astonishment because it means that new home sales are up 9.6 percent from December. This is the highest number of new home sales since July of 2008. That is a 5 and a half year high.
This came as a surprise to many economists. Reuters rescinded their previous forecast, “Economists polled by Reuters had forecast new home sales, which are measured when contracts are signed, falling to a 400,000-unit pace in January.” That did not happen, and hundreds of homeowners proved the conservative prediction to be incorrect.
“NAHB said the January increase was relatively uniform, with three of the four regions posting higher numbers.” For example, “the Midwest fell 17.2%, but the Northeast shot up 73.7%.”
According to The National Association of Home Builders, “some of the rise” in sales could be attributed to home sales that were simply put off for the December Holidays. That comment has a certain merit, but, National Economist, Davie Crowe quelled the pessimists and pointed to a turnaround in the housing industry in 2014, not a big one, but definitely an improved one.
He stated, “There are five key points to the housing industry turnaround,”
1. More Shoppers! He stated, “Consumers are back…”
2. More Demand! He added, “…Pent-up demand is emerging.” The tide of holding back the American dream of home ownership is turning, and as the economy improves, home ownership is becoming more realistic to consumers.
3. More Construction! He stated, “There is a growing need for new construction,” and builders are beginning to trust it.
4. Less Distress! He explained, “distressed sales are diminishing, and builders see it.”
5. Low Mortgage Rates! He added, that whereas current interest rates are higher than a while ago, they are still “historically low,” and “helping sales.”
All of this good news might be leading up to Davie Crowe’s forecast of 822,000 starts in 2014, which will mean about 200,000 more new houses than were built 2013, a “small step” of improvement for the economy, “a giant step” for many families.
Palm State Mortgage Company knows that no statistic can stand alone. This January’s backlog of built homes awaiting owners remained the same as December’s number, 184,000, which indicates builders are hesitant about new construction. This means we have a 7.4-month inventory of new homes. On the other hand, we have noticed that many builders are putting up model homes again, which means they are encouraged about new construction and sales.
Palm State Mortgage reminds you that new homes only tell part of the story of the housing industry and mortgage availability, but for now, it is nice to simply savor the surprise statistics of January. Only time will tell us what it means for the entire year.
