Since #GrowthStabilizing began in late November of last year, housing has been one of the leading drivers of recovery in the US economy. Today’s housing data is indicative that the recovery is still on fire and has no signs of letting up anytime soon. New home sales rose 15.6% month-over-month in January to 437,000; December data was revised up from 369k to 378k making the comp more impressive. On a year-over-year basis, new home sales in January are up 28.9%, which is the fastest rate of growth in the last 12 months. Impressive by all means.
The inventory of new homes for sale was flat at 150k. When looking at inventory on a months supply basis, January stood at 4.1 months, down from 4.8 months in December and the lowest level of inventory since March, 2005. For perspective, months supply floated between 4-5 months from 1997-2005. We would expect to see inventory levels rise, as this reflects a strengthening market. We continue to believe that home prices are heading meaningfully higher in 2013. This morning's New Home Sales data, showing a rising sales rate and falling months supply of inventory, supports our thesis.