New Home Sales ROSE by 9.6% to 468k, after the prior month was revised modestly higher to 427k. This compared with market expectations for a decline to 400k, from the unrevised December level of 414k. While the trend is rising and sales are now 2.2% ABOVE their year ago level they are still a stunning 66.3% BELOW their July 2005 peak.
The Inventory of Homes Available for Sale was UNCHANGED at 184k. Unsold inventories have been trending lower for more than 6 years, even though they are now 23.5% ABOVE its year ago level but still 67.8% BELOW its July 2006 peak level.
Combined with the increase in sales, the Months' Supply dropped sharply to 4.7 months from 5.2 months. This is moderately BELOW a "normal" level of 6.0 months and well BELOW its peak of 12.2 in January 2009.
Home Prices ROSE with median prices 3.4% ABOVE their year ago level and with average prices 5.2% ABOVE their year ago level. Both median and average home prices have been trending higher over the past year.
Bottom Line: New home sales rose sharply more than expected in January, to its highest level since July 2008. Sales over the last three months have averaged 446K and are 3.7% above the 6 month average of 430K. The inventory of unsold homes was unchanged and are now well above their record low level in July 2012 of 143K. Meanwhile, the months supply dropped moderately and remains very lean. New home prices continued to climb relative to their year ago levels but decelerated compared to November’s year over year growth. Regional data shows weather impacts were likely in the Midwest, while the Northeast rebounded sharply from December's weaker tally. The South, where there was also potential for weather impacts, hit highs not seen in 5 years.