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New-Home Sales Surge as Inventory Shrinks in January

New-Home Sales Surge as Inventory Shrinks in January

Today's photos are those of Archival Designs' Award Winning Plan, Blanchard

Sales of newly built, single-family homes rose 15.6% to a seasonally adjusted annual rate of 437,000 units in January, according to figures released by  HUD and the U.S. Census Bureau.  And amidst this quickened sales pace – the fastest since July of 2008 – the months’ supply of new homes for sale fell to its lowest level in nearly eight years. Sales gained in every region in January. The Northeast posted a  27.6% increase while the Midwest registered an 11.1% gain and the South notched up 3.2%. Most impressively, the West showed a 45.3% gain for the month.

Meanwhile, inventory of new homes for sale held unchanged at a relatively meager 150,000 units in January, which amounts to a 4.1 months’ supply at the current sales pace – the tightest supply since March of 2005. Commenting on the latest data, NAHB Chief Economist David Crowe said that rising consumer demand bodes well for the upcoming spring buying season, but the razor-thin supply of new homes for sale is very concerning at a time when we are still only about half-way back to what could be considered a "normal" level of activity.

Builders need to be able to refresh their inventories to keep the momentum going, he said.  "While we can’t expect to see double-digit sales growth every month, consumers are definitely coming off the fence as prices start to rise, and builders in some cases are having a tough time keeping up." He blamed challenges related to credit availability, poor appraisals, dwindling lot supplies, spot shortages of skilled labor and rising materials costs for their role in weighing down the recovery.

Remodelers' Cost of Doing Business Study Now Available

Remodelers now have a unique opportunity to see how their business stacks up against the competition. NAHB BuilderBooks has released the 2012 edition of the Remodelers' Cost of Doing Business Study, a national study of remodelers’ business practices and financial performance that was conducted by NAHB’s Economics and Housing Policy Group.

The study allows remodelers to evaluate their financial performance compared with the industry as a whole and with remodelers of similar type and size. This new resource gives remodelers an inside look at other remodelers’ financial books by providing data about profitability, cost of sales and expenses. It contains a wealth of data and analysis to help remodelers boost profitability, increase efficiency, set realistic budget targets and improve upon their business practices. NAHB members can access The Remodelers’ Cost of Doing Business Study, 2012 Edition as an e-Book for a discounted price of $59.99 (non-member cost is $89.99) at ebooks.builderbooks.com. Contact: ppotts@nahb.com.

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  • Joanne Loftus
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