Washington, DC, United States (4E) – Sales of newly built homes in the U.S. unexpectedly climbed in January, a sign of strength in the housing sector after a period of weakness.
On a seasonally adjusted basis, new home sales climbed 9.6 percent to an annual rate of 468,000 last month from the revised figure of 427,000 in December, according to the Commerce Department report released Wednesday.
Economists polled by the Dow Jones Newswires forecast home sales to fall to an annual rate of 401,000 in January.
The increase was driven by sales in the northeast, which saw a 73.7 percent increase in activity and reversed the decline in the previous month. New home sales fell in the Midwest, but the South and West posted gains.
Higher mortgage rates and home prices prompt prospective home buyers to quickly make purchases. Economists believe this pent-up demand will help drive traffic and activity in the coming months.
Last week, the Commerce Department reported higher permits for new homes, a measure of future demand. In a separate report Tuesday, the Standard Poor’s/Case-Shiller price index showed home prices in 2013 posted their biggest annual gain since 2005.