Sales of newly built homes hit their fastest pace in 6 1/2 years in December, another sign that the housing market may pick up speed in 2015.
The Census Bureau reported that 481,000 new homes were purchased in the month, up 11.6% from November on a seasonally adjusted basis and well ahead of analysts' expectations. For the full year of 2014, sales climbed 1.2%
Market watchers said low interest rates and a generally improving economy are boosting demand for new homes, which on average are higher-priced than resale houses. The median price nationwide hit $298,100.
Builders have also started more new construction in recent months, which suggests more sales in months to come.
The new-home data are volatile, and analysts against reading too much into one month's figure. Still, the December sales number was the highest since June 2008, and the fourth quarter was well ahead of the third quarter, suggesting that this recovery has some legs, said Patrick Newport, an analyst with IHS Global Insight.
"We expect wage growth to support additional household formation in 2015," he wrote. "These forces will help to clear some important obstacles which have restrained demand."
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