New home sales hit five-and-a-half year high in January
By Lucia Mutikani
WASHINGTON (Reuters) - Sales of new U.S. single-family homes surged to a 5-1/2-year high in January, possibly easing concerns of a sharp slowdown in the housing market.
The Commerce Department said on Wednesday that sales jumped 9.6 percent to a seasonally adjusted annual rate of 468,000 units, the highest level since July 2008.
December's sales were revised up to a 427,000-unit pace from the previously reported 414,000-unit rate. Economists polled by Reuters had forecast new home sales, which are measured when contracts are signed, falling to a 400,000-unit pace in January.
Sales in the Northeast soared 73.7 percent to a seven-month high, while the South recorded a 10.4 percent rise in transactions to a more than five-year high.
These regions along with the Midwest have experienced unusually cold weather that has been blamed for holding back economic activity. Sales tumbled 17.2 percent in the Midwest last month, while rising 11 percent in the West.
New homes are a small segment of the housing market, which lost momentum in the second half of last year following a run-up in mortgage rates and a shortage of properties for sale.
Higher borrowing costs and home prices mean that properties are less affordable for many, especially as income growth remains tepid.
Yields on 10-year and 30-year Treasuries rose after the release of the housing data, while U.S. stocks were trading broadly higher. Continued...