By Robbie Whelan and Conor Dougherty | The Wall Street Journal
Sales of new homes are surging in the U.S., far outpacing results for less expensive existing homes and creating an unusual disparity in the housing recovery.
The trend partly reflects the small inventory of previously owned homes, now at a 13-year low after investors picked over the long-depressed market. But the strong sales of new homes also show how the nation’s homebuilders have mastered the art of selling, even to cash-poor buyers or those with spotty credit histories.
New-home sales jumped 28.9% in January from a year earlier to the highest annual sales pace in four years, according to data released Tuesday by the Commerce Department. Sales of previously owned homes rose 9.1%. The disparate selling pace exists even though a typical new home costs 37% more than one already built, the widest price gap since the figures started being tracked in 1968, according to an analysis of home prices by Barclays BARC.LN +0.05% Capital.
In the past two years, more homebuilders have offered to pay closing costs and arrange home loans through in-house mortgage operations. They have hosted free credit-counseling sessions for buyers with bad credit scores, and made heavy use of government-backed mortgage programs that allow buyers to get a home with little or no down payment.
The result is that for many buyers, it has become far easier to buy a new home than an existing one. “It’s as if people were going to the car dealership and realizing that there aren’t any used junkers left, so they’re buying these shiny new SUVs,” said Ivy Zelman, an independent housing analyst.
If you’d like to discuss real estate matters, contact RLG founder Jordan Rose, jrose@roselawgroup.com
