New-Home Sales Fall Slightly in February

Sales of new homes edged lower in February but remained at a relatively robust pace after a strong January, the Commerce Department said Friday.

Sales improved in the West, South and Northeast, but frigid temperatures in the Midwest pulled overall sales of single-family homes down 1.3% to a seasonally adjusted annual rate of 700,000, the Commerce Department said Friday. But sales were stronger than Wall Street economists’ forecasts for a February sales rate of 693,000.

The February decline was the first since sales fell 1.6% in October. The report also showed that sales in January were stronger than previously thought, totaling 709,000 at an annual rate rather than the 693,000 originally estimated.

As a result, sales in the first two months of this year were 19.1% higher than in the same period of 1995.

February’s sales pace was 21.3% ahead of the rate in February 1995 when new homes were selling at a rate of 577,000 a year.

In its report, the department revised up the sales rate for each month from November through January, indicating a significantly stronger housing market as 1995 ended than previously thought.

Mortgage rates declined late last year and, despite some pickup this year, were still significantly lower at the beginning of 1996 than a year earlier.

Federal Home Loan Mortgage Corp. said average rates for a 30-year mortgage loan rose to 7.08% in February from 7.03% in January. That was well below the rate in February 1995, when 30-year loans averaged 8.77%.

The National Assn. of Realtors reported Monday that existing home sales rose 6.5% in February to an annual rate of 3.96 million units. Sales had fallen 3.9% in January.

Sales climbed 23.4% in the Northeast, 8.7% in the West and a scant 0.6% in the South, the biggest housing region. But sales dropped 24% in the Midwest.

The average home sales price in February rose to $161,900 from $152,000 in January.

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New-home sales

Seasonally adjusted annual rate, thousands of units:

(see newspaper for chart)

February 1996: 700

Source: Commerce Department

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* GAPING TRADE GAP

The U.S trade deficit rose to $10.26 billion in January. A1