BCN-20 US new home sales rise in February





US new home sales rise in February

WASHINGTON, March 30, 2019 (BSS/AFP) – Sales of new US homes in rose in
February with broad gains around the country, while the median sales prices
rebounded after falling in the prior month, the government reported Friday.

The positive surprise comes amid other signs the US economy is slowing, but
housing data is notoriously volatile. The report also showed January sales
were much higher than originally report, while figures for December and
November were lower.

Sales of newly-constructed single-family homes rose 0.6 percent compared to
February 2018 to an annual rate of 667,000, seasonally adjusted, the highest
since March of last year, the Commerce Department reported.

The sales pace was nearly five percent higher than the prior month, while
sales in January, which originally showed a steep decline, were revised to
show a solid increase.

Economist Jim O’Sullivan of High Frequency Economics cautions that the many
revisions are “limiting the information value of a single report.”

However, the average for the first two months of the year at 652,000 has
improved on the pace in the prior two quarters, he said in a research note.

Real estate industry data released earlier this month showed sales of
existing home also surged in February, while mortgage applications have been
rising in recent months.

“A robust rebound is underway, tracking mortgage demand,” said Ian
Shepherdson of Pantheon Macroeconomics.

The Commerce Department data showed there were 340,000 new homes still on
the market at the end of last month, which is 6.1 months’ supply at the
current sales pace.

With interest rates falling and supplies rising, a sales pickup could
reverse last year’s slowdown, which had caused analysts to worry growth in
the US economy had peaked.

Shepherdson said he expects housing to boost growth in the first half of
the year, however, he cautioned that the 2017 tax reform, which capped
mortgage deductions “appears to have caused chaos in the existing home
market” in high-tax states.