The latest report from Washington showed that new homes sales cooled-off more than expected in February after surging in January to its highest level in more than four and one-half years. The cost of a new home continued to rise, though, signaling that the nation’s housing market continues to strengthen.
The Commerce Department reported on Tuesday that the number of new homes sold in February slipped 4.6 percent from January to a seasonally adjusted rate of 411,000.
Economists were calling for a decrease in February of 3.9 percent to a 422,000 annual pace.
Meanwhile, the agency revised January’s rate down from an increase of 15.6 percent to a rise of 13.1 percent to an annual rate of 431,000. Even with the revision, it was still the fastest pace of new home sales since July 2008.
Compared to February 2012, the rate of new home sales is up by 12.3 percent. The February 2012 estimate was a 366,000 annual rate.
The median price of new houses sold in February was $246,800 with an average price of $313,700 for the month. The median and average prices for the month were up sharply from $226,400 and $286,300, respectively, in January. Compared to February 2012, the median price is 2.9 percent higher in the latest month.
The report also showed that the number of seasonally adjusted estimate of the number of new houses for sale at the end of February was 152,000, representing a 4.4-month supply at the current rate of sales and an increase from the 150,000 homes available in January.
Separately, data released by S&P/Case-Shiller on Tuesday showed that housing prices rose more than expected in January compared to the year earlier month. The S&P/Case-Shiller index of 20 major metropolitan areas rose by 8.1 percent for the month versus January 2012, to biggest one-year gain since June 2006. Economists had expected a rise of 7.9 percent.
The Phoenix area paced all other cities with a 23 percent increase in home prices.
Historic low mortgage rates and a dwindling inventory of existing homes have been steadily support the housing market recovery. However, the rate of sales and prices are still far from highs before the housing bubble burst in 2006 or even levels that economists consider healthy.
Based on the S&P/Case-Shiller Index, home prices are at 2003 levels again, but about 30 percent below summer 2006 peaks. The February rate of new home sales is new four-year highs at annual rates over 400,000 units, but far under the 700,000 annual pace the economists call healthy in a stable economy.
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