Sales of New Homes Rebounded in February on Jump in West
Daniel Acker — Bloomberg News
Purchases of new homes climbed in February for the fourth time in the past five months as demand snapped back in the western United States.
Sales climbed 2% to a 512,000 annualized pace after a 502,000 rate in January that was stronger than previously reported, Commerce Department figures showed March 23. Demand is in line with last year’s pace, indicating residential construction will remain a source of support for the economy.
Low mortgage rates and a labor market that’s added almost a quarter of a million workers a month on average over the past two years is giving Americans the confidence and means to buy a home. Increased availability of entry-level properties would help persuade lower-income and first-time buyers to move off the sidelines and give the industry an added boost.
“We do expect a pretty healthy spring selling season, with income growth rising pretty solidly and consumer confidence holding in,” Kevin Cummins, an economist at RBS Securities Inc. in Stamford, Connecticut, said before the report. “We expect that sales will grind higher as the year goes on.”
The data are volatile month-to-month, and the February figure should be considered preliminary. The report said there was 90% confidence the change in sales last month ranged from a 16.8% drop to a 20.8% increase.
The median estimate in a Bloomberg News survey called for a 510,000 rate. Economists’ estimates ranged from sales rates of 475,000 to 550,000 after a previously reported 494,000 in January. Purchases were 2.8% lower in February than the same period in 2015 on an unadjusted basis, the Commerce Department’s report showed.
The increase in February was entirely due to a 38.5% surge in the West, the biggest gain since December 2010. Sales in that region had dropped 32.7% a month earlier.
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