U.S. New Home Sales Rebound

By John S. McClenahen After declining unexpectedly in January, sales of new one-family homes in the U.S. rebounded in February -- although not quite to the level economists had anticipated. New residential sales were at an annual rate of 875,000 in February, 5% higher than January's revised rate of 831,000, show data jointly released by the U.S. Commerce Department and the U.S. Department of Housing & Urban Development. Economists, however, had expected February's rate would rise to 880,000. "Over the last three months, there has been a break between the existing and new home sales," observes Stan Shipley, a senior economist at Merrill Lynch & Co., New York. "On balance, new home demand has weakened modestly, while existing home sales have soared. The reality, we believe, is somewhere in between." At the end of February, an estimated 313,000 new homes were for sale in the U.S., a 4.3 months' supply at the current sales rate.

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