• Sales of newly built homes rose 3.7 percent in January from a weak December and 5.5 percent year-over-year, to 555,000 (SAAR), according to the Census Bureau’s January new home sales data. Data from prior months, notably October and November, was revised downward.
• January sales activity was particularly strong in the Northeast (up 22.2 percent from December, though from a small base)) and the West (up 10.9 percent).
• Inventory of new homes for sale climbed 3.5 percent from December and 10.9 percent from January 2016, to 265,000 homes, the highest level of new home inventory since July 2009.

New home sales continued their years-long, slow and steady march upward in January, which is all well and good, but given the level of demand in the market, strong permits and starts activity and a bounce back from a particularly wintry and weak December, it’s fair to say this decent gain could have and should have been a bit more dramatic. Instead of slow and steady gains, the market needs a big infusion of new construction and new home sales activity, and there are signs this could come as the busy spring shopping season gets underway. Inventory of new homes available for sale climbed sharply in January to the highest level since September 2009, a good sign for home shoppers in the months to come. And while the price of newly built homes continues to climb, the pace at which it grew slowed substantially throughout 2016, which could also give buyers a bit of relief. Lately, builders have been focused largely on serving a higher-end clientele, and the extent to which they can build a product affordable to the lower and middle segments of the market will go a long way in determining how the upcoming spring season shakes out.