The Commerce Department said that U.S. new home sales rose 6.1% to 592,000 units in February, reaching the highest level since July 2016. The increase in new home sales implicated that despite high price and tight inventories, the housing market continued to recover.
The median sales price for February was down 3.9% to $296,200, and was decreased 4.9% compared with the same period last year. The lower prices are one of the reasons for boosting sales.
Another reason is the warm weather. According to the National Oceanic and Atmospheric Administration, this February was the second-warmest one on record. The purchase in the Midwest surged by the most since October 2012, which was possibly boosted by the warmer winter weather. In addition, the pickup in demand in February was boosted by 30.9% increase in the Midwest, which led to the 89,000 annualized rate of sales in Midwest, which was the highest since November 2007.
The Labor Department said in the report that for the week ended March 18, initial claims for state unemployment benefits rose 15,000 to 258,000, which is still below the threshold related to healthy labor market, which was 300,000. The four-week moving average of claims increased 1,000 to 240,000 last week.