With this January being the fifth warmest nationally on record, homebuying activity was heightened leading to a 7.9% gain month-to-month. Lower mortgage rates also contributed to the increase. However, the West and the Midwest accounted for almost all of the rise.

 

According to the Wells Fargo Economics Group, new home sales may come back down to normal rates in February but they appear set for more growth as mortgage rates have fallen further and purchase applications have multiplied.

"Home sales are also less likely to be impacted by coronavirus fears in the near-term," states the economic group. "Barring a sustained stock market sell-off, new home sales are expected to trend higher this year, reflecting strong job and income growth and more positive demographics."