New home sales surged again in January, according to government data on Wednesday which showed the US housing market boom continues, making it one of a few sectors that have strengthened amid the pandemic.
Sales of new homes last month jumped 4.3% compared to December, to 923,000 at a seasonally-adjusted annual rate – the level sales would hit if the pace continues at the same rate for 12 months – the Commerce Department reported. But home builders are struggling to keep up with demand – in part due to supply and labour shortages – and economists expect sales to slow this year.
While “sales surprised to the strong side in January,“ Nancy Vanden Houten of Oxford Economics said in an analysis, “Our forecast is for new home sales to moderate ... as rising home prices and a recent backup in mortgage rates price some buyers out of the market.”