New homes sales hit highest level in seven years

New home sales rose 7.8 percent in February, the best showing in seven years and a good sign for the housing market after another rough winter. 

Sales rose to a seasonally adjusted annual rate of 539,000 homes, the fastest sales pace since February 2008, while January sales were better than first reported, the Commerce Department reported on Tuesday.

{mosads}”Today’s numbers are a great start to the spring buying season,” said Tom Woods, chairman of the National Association of Home Builders (NAHB) and a home builder from Blue Springs, Mo. “Hopefully, this is an indicator of how the rest of the year will fare.”

The inventory of new homes for sale was at 210,000 in February, which is a 4.7-month supply at the current sales pace.

A lack of homes for sale has pushed prices up in recent months. 

Regionally, new home sales increased 152.9 percent in the Northeast and 10.1 percent in the South.

Sales dropped 6 percent in the West and 12.9 percent in the Midwest.

“Most sales activity continues to be among existing home owners who are trading up to new construction and taking advantage of low mortgage rates,” said David Crowe, NAHB’s chief economist.

“First-time home buyers remain absent from the market, restricted by tight lending conditions.”