U.S. Home Sales Rose More Than Expected in February, With a Catch

The Commerce Department reported Wednesday U.S. single-family home sales rose 2% last month to an annualized rate of 512,000 units, beating the media forecast. However, the increase was solely driven by a 38.5-percent surge in sales in the West.

Economists polled by Reuters had forecast new home sales, which account for about 9.2% of the housing market, increasing to a 510,000 unit-rate last month. Meanwhile, home sales in January were revised up to 502,000 units from the initially reported 494,000 units. But home sales in the Northeast plunged 24.2% 17.9% in the Midwest, while home sales fell 4.1% in the more populous South.

The report released by the Commerce Department comes after data on Monday from the National association of Realtors showed existing home sales crated 7.1% in February, which some economists blamed on tight inventories and difficulties adjusting the data during the month with a leap day. They also blamed February’s weak sales on a drop in contract signings in January because of snow storms.

Economists polled by Reuters had forecast new home sales, which account for about 9.2 percent of the housing market, rising to a 510,000 unit-rate last month. At February’s current sales pace, it would take 5.6 months to clear the supply of houses on the market, which represents no change from January.