New home sales hit a seven-year high in February continuing three-straight months of growth, according to the latest report from the Commerce Department.
Sales of single-family homes jumped 7.8% from January to an adjusted annual rate of 539,000 units. It’s the best performance since February 2008.
The number surprised many analysts who expected a drop of as much as 3.3%, figuring the cold and snow that hit big portions of the country would keep buyers inside. Meanwhile, January sales were revised up almost 4% from the original report to 500,000.
Prices are also on the rise, up 2.6% year-over-year to an average of $275,000. The South and the snowy Northeast led the country in sales while the Midwest and West were both down for February.
And while the weather didn’t hold back buyers, it did hold back builders. Average sales for new and existing homes for the first two months of 2015 are off their pace, and housing starts are down 17% from January, mostly because of the wicked weather in the Northeast.
Buyers in either market, new or existing homes, don’t have a lot of choices right now. Inventories are below five months, compared to the usual average of six months, according the National Association of Realtors. The low availability is driving prices up, shutting out some buyers despite the historically low interest rates and steady jobs market.
Follow this link to see the complete new homes report from the Commerce Department.