Sales of new US homes in February have climbed to their fastest pace in seven years.
The Commerce Department said that new-home sales shot up 7.8 per cent last month to a seasonally adjusted annual rate of 539,000, the strongest performance since February 2008. January sales were revised up nearly 4 per cent to a rate of 500,000.
Other parts of the housing market have struggled since 2015 got off to a frigid start, despite historically low mortgage rates and a year-long increase in hiring. The shift upward in purchases of newly built homes may suggest that the job growth is spilling over to other parts of the economy.
The strong increase came from the South and, surprisingly, the Northeast, which was hammered by snowstorms last month. The median sales price rose 2.6 per cent since February 2014 to $US275,500.
Still, fierce winter weather has led builders to pull back on the pace of single-family housing starts and shutter construction sites. And sales of existing homes in the first two months of 2015 are running behind the already weak pace set last year, according to the National Association of Realtors.
Housing starts plummeted a seasonally adjusted 17 per cent last month from January, the Commerce Department reported last week.
Builders have also been more focused on the rental market, as high prices have cut into the pool of potential buyers. Approved permits in February to start construction on single-family houses fell to their lower annual rate in eight months, while permits for apartments surged to a 10-month high.
By Josh Boak