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New Home Sales Surge to Highest Level in More than 5 Years

New home sales hit their highest level in January for more than five years
A sold sign hangs in front of a house in Mount Lebanon, Pa. New home sales hit their highest level in January for more than five years Gene J. Puskar / AP

Sales of new single-family homes surged to a 5-1/2-year high in January, which could ease concerns of a sharp slowdown in the housing market.

The Commerce Department said on Wednesday that sales jumped 9.6 percent to a seasonally adjusted annual rate of 468,000 units, the highest level since July 2008. December's sales were revised up to a 427,000-unit pace from the previously reported 414,000-unit rate.

Economists polled by Reuters had forecast new home sales, which are measured when contracts are signed, falling to a 400,000-unit pace in January.

Sales in the Northeast soared 73.7 percent to a seven-month high, while the South recorded a 10.4 percent rise in transactions to a more than five-year high. These regions have borne the brunt of the unseasonably cold weather that has been blamed for holding back economic activity.

Sales, however, tumbled 17.2 percent in the Midwest last month, while rising 11 percent in the West.

- Reuters