Page 7 - ATD25Febr2016

U.S. NEWS A7
Thursday 25 February 2016

US Financial Front:

New-home sales tumble in January, big decline in West

A “For Sale” sign hangs in front of an existing home in Atlanta. Americans may have lost The increase in the aver- course of the 6 ½-year re-
On Wednesday, Feb. 24, 2016, the Commerce Department re- interest in upgrading to a age price has consistently covery from the recession.
ported U.S. home sales crept upward in January, a sign that de- new property. stayed ahead of wage Sales of existing homes rose
mand for housing remains strong amid signs of slower growth A curious price gap ap- growth, hurting affordabil- 0.4 percent last month to
across the broader economy. pears to have opened up ity. a seasonally adjusted an-
because of these trends. New-home sales still lag nual rate of 5.47 million,
(AP Photo/John Bazemore) The median new-home the historic 52-year aver- the National Association
sales price fell 4.5 per- age of 655,200. Subprime of Realtors said Tuesday.
cent from a year ago to mortgages helped push That increase comes on
$278,800, likely because up sales as high as 1.28 mil- the heels of a strong 2015
of fewer purchases in the lion in 2005, a peak that when sales reached their
West. But the average price ultimately signaled a bub- highest level in nine years.
— which includes the ex- ble that burst and pushed Supply of homes has failed
tremes of the market — has the economy into its worst to increase in response to
climbed 2.7 percent from a downturn since the depres- demand, causing the me-
year ago to $365,700, a dif- sion. dian sales price to rise 8.2
ference of nearly $90,000 But demand for housing percent from a year ago to
compared to the median. has recovered over the $213,800.q

JOSH BOAK ernment report with revi-
AP Economics Writer sions and large swings on a
WASHINGTON (AP) — monthly basis.
Americans stepped back “With inventory still very
from buying new homes tight, prices will continue
in January, as purchases to firm, though the short-
plunged sharply in western term numbers are so vola-
states where prices are typ- tile that the trend is hard to
ically higher. spot,” said Ian Shepherd-
The Commerce Depart- son, chief economist at
ment said Wednesday Pantheon Macroeconom-
that new-home sales fell ics.
9.2 percent last month to a Last month’s decrease
seasonally adjusted annual potentially complicates
rate of 494,000. Most of the the outlook for residen-
decline stemmed for a 32.1 tial real estate. Rising de-
drop in sales in the West. mand for existing homes
Sales also slipped in the had sparked hopes that
Midwest, while edging up builders will ramp up con-
in the Northeast and South. struction and sales of new
The pace of buying new homes will further acceler-
homes last month slipped ate.
below last year’s sales total The 14.5 percent increase
of 501,000, a possible sign in new-home sales last year
of mounting price pressures fed into those expecta-
despite low mortgage rates tions. But builders have in-
and job gains that have creasingly focused on the
pushed the unemployment more affluent slivers of the
rate down to 4.9 percent. market, while the decline
But new-home sales also in sales listings of existing
tend to be a volatile gov- homes indicate that many