February 27th, 2015
Last winter, frigid temperatures and snow kept many prospective homebuyers from going on a home search, but heavy snow across parts of the country this January didn’t slow them down from buying newly built properties.
According to the latest new residential sales report from the U.S. Department of Commerce, new-home sales in January went up 0.2 percent compared to December 2014 and 5.3 percent from the same month a year ago. Consumers purchased 481,000 new homes during the month.
Under similar cold and snowy conditions during the previous winter, home sales slowed. Many analysts had given up hope of a resurgence until the spring selling season. This year, however, consumers dug themselves from under mounds of snow to find the newly built homes of their dreams.
Analysts expect more improvement through 2015
While homebuyers produced positive numbers for new-home sales in January, some economists believe the housing market still needs more footing. This is despite current new residential home sales figures beating predictions, Reuters reported. Economists surveyed by the news outlet expected these sales to dip to 470,000 units in January.
IHS Global Insight economist Stephanie Karol is one of the analysts who wants to see more from the market going into the rest of the year.
“We are still taking sort of a meandering, bumpy path towards recovery,” she said, according to Reuters. “We expect housing will improve later this year due to the improvement in the labor market and credit conditions.”
Factors producing subpar housing outlooks
Reuters noted Karol isn’t the only one who believes the housing market is somewhat underperforming, especially in comparison to activity in 2013, when the sector saw immense growth following the economic downturn.
One factor supporting the assertion that housing is lackluster was the latest existing-home sales report from the National Association of Realtors, which revealed a 4.9 percent decline in January compared to the previous month. Reuters also pointed to weaker housing starts and permits for single-family homes during January.
While these conditions don’t present the best picture, home resales did increase year over year. Also, the inventory of available existing homes saw improvement month over month. The spring selling season hasn’t started yet, but it appears the market is already picking up in a few regards at the start of the year. Consumers who aren’t afraid to venture out into the winter wonderland may want to explore their housing options while inventory is seeing some gains.