WASHINGTON – U.S. sales of new homes bounced back in January to the fastest pace in more than five years, offering hopes that housing could be regaining momentum after a slowdown last year caused by rising interest rates.
Sales of new homes increased 9.6 percent in January to a seasonally adjusted annual rate of 468,000, the Commerce Department reported Wednesday. That was the fastest pace since July 2008.
The rise came as a surprise to economists who had been forecasting a sales drop in January, in part because of a belief that activity would be held back by bad winter storms in many parts of the country.
Sales had fallen 3.8 percent in December and 1.8 percent in November, leading to worries that the housing recovery could be losing momentum.
The big January gain was likely to ease those concerns. Many economists believe sales of both new and previously occupied homes will rise in 2014, helped by an improving economy and job gains which will boost the number of people working.
The median price of a new home sold in January was up 3.4 percent from a year ago to $260,100.
Economists expect sales to grow more in 2014 although they do not expect the gain to be as robust as the 2013 increase.
Price increases are expected to moderate in 2014 as well. The Standard & Poor’s/Case-Shiller 20-city home price index rose by a healthy 13.4 percent in 2013. That was the largest calendar gain in eight years.
Economists are looking for further sales gains as the economy continues to gain momentum and more people are able to get jobs. Further gains in home sales will spur more jobs in the construction industry and help to support economic growth.
The National Association of Realtors reported last week that sales of existing homes plummeted in January to an annual rate of 4.62 million units. That was down 5.1 percent from the December pace.
Freezing temperatures and snowstorms caused a slip in housing activity this winter while higher mortgage rates and higher prices had acted to slow growth earlier in the year.