Americans reacted to higher home loan rates by snapping up new homes in February at the quickest pace since July. New home sales increased 6.1 percent month-over-month to an occasionally balanced yearly rate of 592,000, according to the Commerce Department. That sales pace is almost 13 percent higher than February of a year ago, a favorable indication for the housing market that demand is strong towards the beginning of the spring home buying season.
An improved job growth and a recovering economy have pushed up enthusiasm for new homes, while the possibility of rising home loan rates since the November presidential race may have pulled a few deals forward.
An exceptionally warm February also likely helped fuel sales.
“Sales were likely boosted by the much warmer-than-usual weather last month, which made visiting new-home construction sites less miserable than usual in February,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
Developers have increase the development of new homes, helping to meet solid demand and boost sales. That could give a slight lift to the more extensive economy through development jobs and the consumer spending connected to home purchases.