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Business - Reuters WASHINGTON (Reuters) - Sales of new US homes soared 94 percent in Febr uary, the largest jump in more than four years and well above Wall Stree t forecasts, as sales rose nationwide, a government report showed on Thu rsday.
Economists had expected sales to climb more modestly to a 1150 million u nit rate from the 1106 million pace originally reported for January. Th e increase was the largest since December 2000 and took the sales pace b ack to its December 2004 level. In the South, which boasts the lion's share of housing activity, sales climbed 9 percent to a record pace of 619,000.
web sit es) continues to push interest rates higher to head off inflation. On Tuesday, the Fed raised the benchmark federal funds rate by a quarter- percentage point for the seventh straight time, taking it to 275 percen t However, long-term rates set by the markets, including fixed mortgage rat es, have been slow to respond and the home sales report showed activity remains at high levels. At February's sales pace, the supply of new homes on the market stood at 44 months' worth, a decline from January's 46 months' supply. The median sales price of new houses in February rose to a record $230,70 0 from $210,400 in January. In a report on Wednesday, the National Association of Realtors said sales of existing US homes dipped 04 percent last month, to a still-health y 594 million unit rate, a further sign rising interest rates have yet to have much bite. The Mortgage Bankers Association said on W ednesday applications for mortgages dropped last week due to the rising cost of loans. Rates on fixed 30-year loans hit an average 595 percent last week, the highest level since August.
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