Tuesday, March 11, 2014
Christopher S. Rugaber / The Associated Press
WASHINGTON — U.S. new-home sales jumped in January from the previous month to the highest level since July 2008, a sign that the housing recovery is accelerating.
The old Adams School site on Wilson and Vesper Streets is being converted by Avesta Housing into the Adams School Condominiums & Marada Adams Park as seen in this aerial photograph Wednesday, February 6, 2013. Construction is expected to be complete by the spring.
Gabe Souza/Staff Photographer
The Commerce Department said Tuesday that new-home sales rose nearly 16 percent in January to a seasonally adjusted annual rate of 437,000. The percentage increase was the largest in nearly 20 years. And December's sales were revised higher to 378,000 from 369,000.
Steady job creation and near-record-low mortgage rates are spurring more Americans to buy houses. At the same time, the number of previously occupied homes for sale is at a 13-year low. That shortage creates more demand for new homes. Builders began construction on the most homes in four years last year.
Though new homes represent less than 20 percent of the housing sales market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to data from the National Association of Homebuilders.
The increase in home building has helped boost construction hiring. The industry has gained 98,000 jobs since September, the best stretch since the spring of 2006.
Still, the increases in new-home sales are coming from depressed levels. Sales plummeted to a record low in 2011. And sales are still well below the 700,000 annual level that economists consider healthy.