New Home Sales Surge in February

Sales of new one-family houses in February were at a seasonally adjusted annual rate of 1.23 million units, according to latest Commerce Department estimate. This is 9.4 percent above the revised January rate of 1.12 million.

The sales rate matched Decemberís pace as the second highest, just below Octoberís record 1.3 million units. February posted the largest percentage increase in four years.

The supply of new homes on the market rose to a record 444,000 representing a 4.4-month supply at the February sales pace. In January, the inventory had spiked to a 4.6-month supply.

The median sales price of new homes sold in February was $230,700; the average sales price was $288,400.

Home sales and new construction have stayed strong despite mortgage rate increases. Sales of existing homes dipped slightly in February to a still-strong 6.79 million unit annual pace, according to the National Association of Realtors. That figure includes both single-family homes and condos.

Mortgage rates have risen sharply since February to around 6 percent. Economists for housing and real estate groups say they believe rising incomes and continued appreciation in home values will keep demand strong even as interest rates rise.

In February, new home sales rose in all four regions of the country. Sales in the South climbed 9 percent to a record 619,000 annual rate. Sales increased about 20 percent in the Northeast, 10 percent in the Midwest and about 7 percent in the West.

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