US new home sales surge in February

WASHINGTON: Sales of new single-family homes in the United States surged in February to a seven-year high, accelerating for the third consecutive month, the Commerce Department reported on Tuesday (Mar 24).

New home sales advanced 7.8 per cent in February from January to an annual rate of 539,000 units. Most analysts had forecast a decline of 3.3 per cent for the month, which was marked by unusually bad winter weather in large areas of the country.

Compared with a year ago, new home sales in February were up 24.8 per cent. The monthly data series is notorious for sharp revisions; the department upwardly revised the prior two months’ sales. In February, the median price of new homes sold fell 4.8 per cent to US$275,500.

The number of new homes on the market at the end of February was 210,000. At the current sales pace, that represented a 4.7-months supply, a full month lower than in January and the tightest inventory since May 2014.

“This is a break from the disappointing round of housing numbers of late, and suggests some support for (housing) starts in coming months,” said Jennifer Lee of BMO Capital Markets in a research note.

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