Mild January Weather Boosts Home Sales Nationally Sudden Surge Also May Reflect Change In Data-Collection Methods

A government report showed new home sales unexpectedly surging to a nearly 11-year high in January. But economists weren’t sure what to make of it because of a data-collection change.

“It’s so outlandish on the strong side,” David F. Seiders, chief economist of the National Association of Home Builders, said of the 8.6 percent sales jump. “In our signals from the field, nothing says this was going to happen.”

In advance, analysts were looking for a modest sales decline. So Tuesday’s report from the Commerce Department briefly roiled the inflation-sensitive bond market until the government’s disclosure of a change in its data collection methods sank in.

The department said its field agents started collecting sales data with laptop computers, rather than with paper and pencil. It said that more accurate method likely resulted in “some upward bias” to the number but it used statistical methods to dampen erratic fluctuations.

Economists and bond traders said the Commerce Department should have announced the methodology change in advance but said, in the end, the report had only a passing impact.

It showed that Americans purchased new, single-family homes at a seasonally adjusted annual rate of 870,000, the highest level since March 1986.

Among the factors supporting sales were unseasonably warm weather in some regions, relatively low mortgage rates and moderate economic growth.

Housing was a key source of economic strength last year, when 758,000 new homes were sold, the largest number since 1978. Analysts are expecting another good year, but not as strong as last year

“It looks like housing is plateauing at a high level or maybe easing just a bit,” said economist Lyle Gramley of the Mortgage Bankers Association of America.

In another report, the Index of Leading Economic Indicators rose 0.3 percent in January. The gain, reported in New York by the private Conference Board, follows a 0.1 percent rise in December and a revised 0.1 percent increase in November.

The January home sales increase was largest in the Northeast, where sales shot up 63.4 percent to the highest level since November 1987. Sales jumped 11.9 percent in the South. However, they fell 10.3 percent in the Midwest and 5.9 percent in the West.

The national median selling price for a new home, meaning half sold for more and half for less, was $145,000 in January, up 9.9 percent from $133,900 a year ago. But rates below 8 percent on 30-year, fixed-rate mortgages have helped affordability.