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P.M. BRIEFING : Sales of New Homes Surge 4.9%

<i> From Times wire services </i>

Sales of new, single-family homes rose 4.9% in January, pulled up by a surge of activity in the Midwest, the government said today.

The Commerce Department said sales reached a seasonally adjusted annual rate of 704,000 in January, following a 2% increase in December and an 8.4% drop in November. January’s strong showing aside, analysts have been forecasting a gradual decline in construction of single-family homes this year based on expectations that mortgage interest rates will continue to rise and the economy will slow.

Fixed-rate home mortgages last week were averaging 10.78%, up from 9.87% a year earlier, according to the Federal Home Loan Mortgage Corp.


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