WASHINGTON, March 23 (Reuters) - New U.S. single-family home
sales jumped to a seven-month high in February, suggesting the
housing market recovery continued to gain momentum despite the
challenges of high prices and tight inventories.
The Commerce Department said on Thursday new home sales
increased 6.1 percent to a seasonally adjusted annual rate of
592,000 units last month, the highest level since July 2016.
January’s sales pace was revised up to 558,000 units from
the previously reported 555,000 units. New home sales have now
recouped a sharp drop suffered in December.
Economists polled by Reuters had forecast new home sales,
which account for about 9.7 percent of overall home sales,
gaining 0.7 percent to a rate of 565,000 units last month.
New home sales, which are derived from building permits, are
volatile on a month-to-month basis and subject to large
revisions. Sales were up 12.8 percent compared to February 2016,
showing the housing market’s resilience.
Sales last month were likely partially buoyed by
unseasonably warm weather.
Most economists see a limited impact on housing from higher
mortgage rates because a tightening labor market is improving
employment opportunities for young adults. The market for new
houses is benefiting from a shortage of properties for sale.
A report on Wednesday showed a 3.7 percent drop in sales of
existing homes in February amid tight inventories and rising
house prices. The 30-year fixed mortgage rate is currently
around 4.30 percent.
Last month, new single-family homes sales slumped 21.4
percent in the Northeast region. Sales surged 30.9 percent to
their highest level since November 2007 in the Midwest and
increased 3.6 percent in the South.
They jumped 7.5 percent in the West. The inventory of new
homes on the market increased 1.5 percent to 266,000 units last
month, still less than half of what it was at its peak during
the housing boom in 2006.
At February’s sales pace it would take 5.4 months to clear
the supply of houses on the market, down from 5.6 months in
A six-month supply is viewed as a healthy balance between
supply and demand. The median price for a new home fell 4.9
percent to $296,200 in February from a year ago.
Reporting by Lucia Mutikani; Editing by Paul Simao