New numbers from the U.S. Census Bureau and the Department of Housing and Urban Development show new home sales reached an 11-month high in February. In fact, sales rose 4.9 percent over the previous month, beating economists’ expectations and rising above numbers from last year at the same time. There was also a revision to January’s estimate, which added nearly 30,000 sales to initial reports.
Regionally, new home sales surged in the Midwest and Northeast, while remaining relatively flat in the South and West. Overall, the numbers were encouraging, as it shows home buyers are returning to the market after rising mortgage rates slowed activity last fall. Since then, however, rates have retreated. Buyers have taken notice, and demand for homes is increasing.
If softening prices continue through the spring and summer season, homebuyers can expect to find improved affordability conditions and a more balanced market. Also in the report, the median sales price of new homes sold in February was $315,300, which is a 3.6 percent drop from last year.