New Home Sales Cool Slightly in January - 3/1/2004 - Mortgage Loan Refinance Debt Equity

New Home Sales Cool Slightly in January

New single-family homes were sold at an annual rate of 1.106 million units, the Commerce Department reported last week, down 1.7% from December’s upwardly-revised rate of 1.125 million units, but 9.6 percent above the rate reported a year earlier.

“Builders across the country are still very upbeat about the single-family housing market,” said NAHB President Bobby Rayburn. “Harsh weather may have affected sales in some regions of the country, but with low mortgage rates and strong house price performance continuing to fuel demand, there was hardly a dent in the totals.”

“Some cooling from the world-class pace of the fourth quarter was expected, but sales are still well above the overall pace of 2003,” said NAHB Chief Economist David Seiders. “We are projecting a 3% decline in new home sales for the year as a whole, based primarily on anticipated upward movements in mortgage rates as the year progresses. However, if interest rates remain at or near current levels throughout the year, new home sales could equal or even surpass the 2003 record.”

Sales declined 2.1% in the South, 3.9% in the West and 5% in the Northeast. They were up 5.6% in the Midwest.

January’s inventory of new homes for sale increased slightly to 370,000 units, representing only a 4.1-month supply at the current sales pace, which is quite low by historical standards.

“There was very little increase in inventories, and the supply-demand balance remains very healthy,” Seiders said. “In fact, most of the units for sale by builders are still under construction or in the permitting process and not even started.”