New Home Sales Rise Strongly in February

Washington, D.C., Mar. 24--Sales of new U.S. homes surged unexpectedly in February to their highest level since August, a Commerce Department report showed on Wednesday, suggesting the housing market continues to benefit from low interest rates. Commerce said sales of new homes rose a stronger-than-expected 5.8 percent to a seasonally adjusted 1.163 million annual pace in February, the fastest rate since August 2003's 1.190 million clip. January new home purchases were revised lower, however, to a 1.099 million rate from the initially reported 1.106 million pace. February's results came in above Wall Street expectations for sales at a 1.098 million rate and showed homebuyers were not deterred in February, even as builders slowed construction of homes. Homebuyers continued to be lured into the market by low mortgage interest rates. Compared to February 2003, new home sales were up a hefty 24.4 percent. The supply of new homes relative to demand also dipped in February, and, at 3.8 months' worth, showed the leanest inventory of new homes on the market since September.