New Home Sales Jump 7.8% In February

Sales of newly-constructed single-family homes rose 7.8% in February compared to January, a volatile monthly report revealed Tuesday. February sales of new single-family homes reached an annual, seasonally-adjusted rate of 539,000, according to data from the Commerce Department. That level is 24.8% above the February 2014 estimate of 432,000. The new home sales data–which tallies the number of newly constructed homes with a committed sale each month–is viewed by economists as a measure of economic momentum and an indicator of future consumer purchases of furniture and appliances. But the monthly report is also quite volatile thanks to a small sample size and a margin of error around 15%. Tuesday’s numbers far surpassed the expectations of economists surveyed by Bloomberg ahead of the report, who forecast a consensus 462,000 new home sales pace for February. Economist Bill McBride, of the popular blog Calculated Risk, commented that the data so far shows 2015 is off to a fairly good start. "The Census Bureau reported that new home sales this year, through February, were 81,000, Not seasonally adjusted (NSA). That is up 19% from 68,000 during the same period of 2014 (NSA). This is very early - and the next six months are usually the strongest of the year NSA - but this is a solid start." The median price of a new home sold in February was $275,500; the average sales price was $341,000. At the end of February inventory stood at 210,000, a 4.7-month supply at the current sales pace. Separately, a report Monday from the National Association of Homebuilders showed that sales of existing (previously-owned) homes ticked up by 1.2% in February. Groundbreakings on new homes fell 17% in February compared to January, due in part to that month's extreme winter weather. Builder confidence in the market for new, single-family homes in March fell two points, to a level of 53. A reading above 50 indicates that more builders feel conditions are good than poor. Tuesday’s release of new home sales includes a revision of prior months’ numbers, which shows the sales pace has been generally picking up since November. New home sales numbers (annualized, seasonally adjusted): February 2015: 539,000 January 2015: 500,000 (revised) December 2014: 479,000 (revised) November 2014: 448,000 (revised) October 2014: 469,000 September 2014: 456,000 August 2014: 448,000 July 2014: 399,000 June 2014: 409,000 May 2014: 458,000 April 2014: 413,000