New home sales spike in December

Sales of new single-family homes across the country rose 17.5% from November to December, to an annual rate of 329,000, the highest level since April, according to the Commerce Department. Economists interviewed by Dow Jones Newswires had anticipated an increase of just 3.1%.

Even with the sharp rise in sales, December’s numbers are still 7.6% lower than those for December 2009.

Resales have also increased, something the National Association of Realtors attributes to rising mortgage rates. We’ve read articles and heard from several agents lately that the potential for rates to continue rising is as much of a factor, if not more, in getting buyers off the sidelines. Just today, Realtor Gary Lucido suggested that buyers have already missed the lowest housing costs in 23 years when both Case-Shiller values and annual interest costs for mortgages are factored together, not because home values are improving, but because mortgage rates have spiked by more than 11% in recent months.

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