In some surprising and encouraging news for the national residential housing market, sales of new homes in January rose by 9.6 percent, the highest rate since July 2008, and it is predicted that the rate for both new and existing home sales will continue to rise in 2014.
Economists had predicted a drop in the rate for January, mostly due to winter storms across much of the country, but only the Midwestern market posted a decline in new-home sales for January, dropping 17 percent. Sales in the northeast rose by 74 percent, followed by the west at 11 percent, and the south by 10 percent. The median new-home price also rose 3.4 percent from a year ago to $260,100.
Despite the 30-year mortgage rate having just risen to 4.33 percent, signs are pointing to a healthy residential market in 2014 as a result of growing household incomes, and double-digit growth in residential construction over the past two years, which contributed to the nation’s overall economic growth.