WASHINGTON – “Americans rushed to buy new homes in December at the strongest pace in 10 months, with 2015 marking the strongest year for this segment of the housing market since 2008. The Commerce Department said Wednesday that new home sales surged 10.8% last month to a seasonally adjusted annual rate of 544,000. It was the third consecutive monthly gain since sale collapsed in September. The increase nearly pulled the sales rate even with the level of 545,000 in February 2015 and points to continued momentum for real estate and construction in the opening months of this year.
This is a promised sign for the housing market as we move into 2016 – said Tian Liu, chief economist at Genworth Mortgage Insurance…..’we expect the strong increase in new home sales to continue as the fundamentals in the housing market remain strong and newer homes are in short supply’…
Steady job growth growth that cut the unemployment rate to a healthy 5% has given many homebuyers increased confidence, while relatively low mortgage rates improved affordability. Builders responded to the demand by increasing construction. Over 2015, new starts rose 10.8% to 1.1 million…yet supplies remain relatively low with only 5.2 months’ inventory of new homes available. The industry generally considers six months’ supply to be healthy.
Mortgage buyer Freddie Mac says the average rate on a 30-year, fixed-rate mortgage declined to 3.81% last week from 3.92% a week earlier. Rates have historically average 6%, meaning that interest expenses are relatively low for homebuyers.”
SOURCE: Josh Boak/Associated Press/Asheville Citizen-Times