Could new-home sales set tone for 2015?
Posted on Thursday, March 26, 2015 at 8:05:40 AM
Existing-home sales were a bit lackluster in early 2015, but this doesn't seem to be the case for new homes. Recent data from the U.S. Department of Commerce found that new single-family home sales were up on both a year-over-year and month-over-month basis in February.
According to the information, sales ticked up 7.8 percent from January to February and 24.8 percent from February 2014 to February 2015. Given the current sales rate, the estimate for new-home supply is at 4.7 months.
The National Association of Home Builders added that this sales pace is the best seen since February 2008. Tom Woods, NAHB chairman, hoped that the data is a sign of more positive sales to come. NAHB chief economist David Crowe added that low residential financing rates could have helped spur sales.
"Most sales activity continues to be among existing home owners who are trading up to new construction and taking advantage of low mortgage rates," noted Crowe. "First-time home buyers remain absent from the market, restricted by tight lending conditions."
While there are pros and cons to the current housing market, the significant sales gains for new construction is a good sign that buyers will be active throughout 2015.