Yahoo Finance Feb. Sales Of New Homes Hit 7-Yr. High
New-home sales rose to a seven-year high in February, the Commerce Department said Tuesday, defying forecasts for a drop amid harsh winter weather.
The news boosted shares of homebuilders such as Toll Bros. (TOL) and Lennar (LEN).
Sales were at a seasonally adjusted annual rate of 539,000, the best since February 2008. That was 7.8% above an upwardly revised January and 24.8% higher than a year earlier. Analysts expected an annualized 462,000.
The median sales price of new houses sold in February 2015 was $275,500, down 4.8% vs. January and the third straight monthly drop. Year over year, the median price rose just 2.6%.
The number of new houses for sale at the end of February was 210,000. That's a supply of 4.7 months at the current sales pace, below the normal five to six.
The supply of existing homes — a far bigger pool — was just 4.6 months' worth in February, the National Association of Realtors said Monday. Resales rose 1.2% to a 4.88 million annual rate.
"We're finally starting to see strong gains relative to the low levels of new home sales," Danielle Hale, NAR's director of housing statistics, told IBD. "The report suggests the housing market recovery is still progressing and moving in the right direction. It's not quite at the normal level, but moving a little bit closer.
Jennifer Lee, director of economic research at BMO Capital Markets, noted in a report: "That's three consecutive months of gains, a trend which fits well with the number of homebuilders who have been reporting stronger orders and have been making optimistic noises about the upcoming spring season ... Bottom Line: This is a break from the disappointing round of housing (numbers) of late, and suggests some support for starts in coming months.
Lennar and KB Home (KBH) last week both reported better-than-expected earnings. Profit margins fell for both, but they had warned about it previously. Lennar saw declining orders in the Houston area, which faces job losses amid falling energy prices.
Lennar, KB Home, Meritage Homes (MTH) and Toll shares rose more than 1%.
Existing-home sales rose 4.7% vs. February 2014, the fifth straight month of year-over-year gains. The median price rose 7.5% to $202,600, the biggest annual gain in a year.
"Although February sales showed modest improvement, there's been some stagnation in the market in recent months," said NAR Chief Economist Lawrence Yun. "Insufficient supply appears to be hampering prospective buyers in several areas of the country and is hiking prices to near unsuitable levels."
