New Home Sales on The Rise

Builder confidence rose earlier this year along with an improving business outlook. Sales of new homes rose to a 10-month high earlier this year, but the current economic climate and rising mortgage interest rates could slow down a market recovery.

The U.S. Commerce Department reported that new home sales increased 7.2% in January, which brought numbers to a seasonally-adjusted annual rate of 670,000 properties. This was the highest level since March 2022 and outperformed economists' predictions by 50,000 properties.

On a regional basis, home sales surged in the South, which continues to be a popular relocation destination for companies who prefer a business-friendly, low-tax state. However, property sales fell in the Midwest, Northeast and West.

Perhaps the biggest obstacle to a major market turnaround: the Federal Reserve's plans to continue raising interest rates this year until inflation numbers fall to an acceptable level.

Source: reuters.com

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