The housing market made a rebound in February. New single-family home sales rose in February to their highest levels in 7 years. The Commerce Department released their data on Tuesday showing that sales rose by 7.8%.
The adjusted annual rate rose to 539,000 units. January’s rate was also revised to 500,000 units, which is higher than the initial estimate of 481,000 units sold. The news comes as a shock to economists that suggested sales to fall to 465,000 units in February. The Commerce Department counts sales only when contracts are signed.
Sales were sporadic in February. While a major surge was seen in the Northeast (152%), sales fell in the Midwest by 12.9%. Sales in the South also rose by 10%, while sales in the West fell 6%. This is good news for the market. In January, it was estimated that it would take over 5 months for the supply of new homes to run out at the previous rate. February’s sale surge has caused this number to fall to 4.7 months. This is a strong indicator that the market is on the rise.
Previously owned homes had their prices increase in February by 7.5% on the year.
According to Zillow, 5 million renters aspire to buy a home in the next year.