New home sales surged to start 2020, according a joint report from HUD and the Census Bureau. Based on their data, the three-month moving average for new single-family home sales reached 721,000 in January. That marked the strongest month since September 2007.
Contracts for new home sales jumped 7.9% in January to a 764,000 seasonally adjusted annual rate, and December’s estimate was revised upwardly from 694,000 to a new estimate of 708,000.
HUD and the Census Bureau credit lower mortgage rates and historically low unemployment with propelling the strong sales.
A comparison of regions shows the Northeast had the largest increase in sales, at 30.3%, followed by the West at 23.5%, and the Northwest at 4.8%. Sales in the South dropped 4.4%.
Year-over-year inventory of new homes for sale slipped 6.6% from a year ago. The current months’ supply fell to 5.1 in January.
The median price for January’s sales was $348,200, a 7.4% gain compared to the December median price of $324,100, and a 14% jump from the year ago price of $305,400.
The HUD-Census Bureau report showed a limited selection of newly built home sales priced under $200,000, with only 9% in that segment. Conversely, the volume priced at or above $400,000 increased.