Housing Data Presents Conflicting Information

January housing data in the US has been uneven, with reports from the National Association of Realtors showing that existing home sales declined in January but home builders claiming that new home purchases were on the rise. Housing market data so far has been disappointing in comparison to other economic indicators throughout the US’ recovery, but many wonder if the January data could be seen as a sign of improvement.

Existing Home Sales Slump

Data out this week showed that previously owned home sales fell 4.9 percent in January, suggesting that increasing prices and diminishing supply could be weighing on the housing market. Although extreme winter weather on the East coast could have contributed to the slump, the data showed that a decline in purchases was evident across the entire country, even in states where weather was mild.

New Home Sales Booming

However, a survey of home builders earlier in February painted a much rosier picture of the US housing market. A Zelman Associates survey showed that orders for new homes had risen 32 percent in January compared to a year ago, an improvement from December’s 27 percent increase. The figures suggest that loosening mortgage requirements coupled with falling unemployment are helping spur on the housing market.

What Do The Discrepancies Mean?

The fact that existing home sales are not picking up as quickly as new home sales could be explained by the fact that there are fewer homes on the market, which has pushed buyers to consider building their own. Additionally, January 2015 orders for new homes could be somewhat cushioned because of subdued figures in 2014, which were extremely low due to weather conditions. 

Good News Or Bad News?

In any case, most analysts agree that January is too soon to be sure of how the housing market will perform come Spring when most Americans begin house-hunting. However, the fact that home prices are on the rise is a good sign for the market and most are forecasting increasing home purchases through 2015 based largely on the US economic recovery.