Sales of new U.S. houses in February capped the best back-to-back months in more than four years, spurred by near record-low borrowing costs and improving job prospects.
Purchases of newly built homes fell 4.6 percent to a 411,000 annualized pace, following a 431,000 rate in the prior month that was lower than previously estimated, the Commerce Department reported today in Washington. The median estimate of 78 economists surveyed by Bloomberg called for a decrease to 420,000. It was the best two-month showing since August and September 2008.
The increase in demand is contributing to growth as it ripples through the economy, boosting home-improvement retailers, appliance and furniture makers and builders including KB Home (KBH) and Lennar Corp. (LEN) At the same time, still-restrictive lending rules and a lack of available land on which to work may keep a lid on how fast the housing rebound unfolds.
“We’re still in the early innings of the housing recovery,” Michelle Meyer, a senior U.S. economist at Bank of America Corp. in New York, said before the report. Meyer is the second-best forecaster for new home sales over the past two years according to data compiled by Bloomberg. “There’s much father to go in terms of returning to normal, but the upward trend has started.”
Economists’ estimates ranged from 397,000 to 454,000 after a previously reported 437,000 pace in January.
The median sales price increased 2.9 percent in February from the same month last year, to $246,800, today’s report showed.
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