The housing market’s comeback appears to be building.
Sales of new single-family homes surged in January to a level last seen 4-1/2 years ago, while a separate report showed home prices in December notched their biggest gain since 2006.
After years of holding the economy back in the wake of the mortgage meltdown, housing has been rebounding, bolstered by super-low interest rates, attractive prices and a better job market.
“There is a strong case that there will be a sustainable recovery in housing,” Sean Incremona, an economist at 4CAST, told the Daily News.
Still, he cautioned that it may be a bumpy ride higher with the economy only making measured progress and Americans’ incomes barely growing.
Purchases of new homes jumped 16% to a seasonally adjusted annualized rate of 437,000 units, the Commerce Department said. The gain was the largest on a percentage basis since April 1993. Over the year that ended in January, sales were up 29%.
The report also showed the number of new homes on the market last month was the smallest since 2005, potentially encouraging more construction.
A tight supply of homes is helping squeeze prices higher. Home values in 20 metro areas climbed 6.8% in December from the same month a year earlier, according to the S&P/Case-Shiller property value index. In November, prices were up 5.4%.
New York, though, was December’s sole weak spot. Prices in the area, which includes parts of Westchester and Connecticut, were down 0.5% from December 2011.
Values in the region have fallen for 28 straight months on a year-over-year basis, a trend David Blitzer, chairman of the Index Committees at S&P Dow Jones Indices, puts down to job cuts in the financial sector.
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