WASHINGTON, D.C.

Sales of newly-built, single-family homes rose 15.6 percent to a seasonally adjusted annual rate of 437,000 units in January, according to newly released figures from HUD and the U.S. Census Bureau. Amid this quickened sales pace - the fastest since July of 2008 - the months' supply of new homes for sale fell to its lowest level in nearly eight years.

"The surge in demand for new homes this January is an excellent sign that the housing recovery is gaining steam and helping put more people back to work," said Rick Judson, chairman of the National Association of Home Builders (NAHB) and a home builder from Charlotte, North Carolina.

"While we can't expect to see double-digit sales growth every month, consumers are definitely coming off the fence as prices start to rise, and builders in some cases are having a tough time keeping up. Challenges related to credit availability, poor appraisals, dwindling lot supplies, spot shortages of skilled labor and rising materials costs are all weighing on the recovery process."

"Today's report shows a strong revival in new-home sales across all regions of the country and bodes well for the upcoming spring buying season," said NAHB chief economist David Crowe. "That said, the razor-thin supply of new homes for sale is very concerning at a time when we are only about halfway back to what could be considered a 'normal' level of activity. Builders need to be able to refresh their inventories to keep the momentum going."

New-home sales posted solid gains across every region in January, including a 27.6 percent increase in the Northeast, an 11.1 percent gain in the Midwest, a 3.2 percent gain in the South and a 45.3 percent gain in the West.

The inventory of new homes for sale held unchanged at a relatively meager 150,000 units in January. This amounts to a 4.1 months' supply at the current sales pace - the smallest months' supply since March of 2005.

NEW YORK, NEW YORK

Consumer confidence improved in February, with the headline number
climbing 11.2 points and both the present situation and expectations series posting solid gains. February's improvement was likely exaggerated by a couple of extraneous factors. The survey period likely captured some of the relief that the fiscal cliff was resolved without too much trouble but was completed too soon to include much of the recent anxiety over the looming sequestration.

February is also an odd month for consumer confidence, which hit its all-time low in February 2009. The seasonal adjustment process tends to exaggerate increases during this month. Past years have seen consumer confidence give back some of its February gains in subsequent months.

This year, with the impending budget cuts, rising gasoline prices and renewed worries about Europe, we will likely see the same thing occur."