Purchases of new homes increased in February to a seven-month high, indicating the effects of the recent rise in borrowing costs on the U.S. residential real estate market have been modest.
Sales rose 6.1 percent to a 592,000 annualized pace, Commerce Department data showed Thursday. The median forecast in a Bloomberg survey called for a 564,000 rate. Warmer winter weather probably played a role in boosting demand as purchases in the Midwest surged by the most since October 2012.
The pace of new single-family home purchases is building on a solid 2016, which was the strongest in nine years. Resilient job growth and steadily improving household balance sheets continue to underpin demand as they allow some buyers to withstand higher mortgage rates.
Estimates in the Bloomberg survey ranged from 543,000 to 600,000. The Commerce Department revised the January reading to a 558,000 pace from a previously estimated 555,000.
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