New home sales in surprise rebound

NEW YORK (CNNMoney.com) -- Sales of newly constructed homes rose unexpectedly in February, rebounding nearly 5% after sinking to the lowest level on record in January, according to a government report released Wednesday.

The U.S. Census Bureau reported that new home sales rose 4.7% to a seasonally adjusted annual rate of 337,000 in February from a revised 322,000 in January. It was the first increase since July, and comes after sales tumbled to an all-time low in the previous month.

Economists were expecting a sales rate of 300,000, according to consensus estimates compiled by Briefing.com.

While February purchases were up from January's record low, the sales rate is still down more than 41% from February 2008, when sales were an estimated 572,000.

The report is "generally a good sign," said Andreas Carbacho-Burgos, an economist at Moody's Economy.com. "But it's definitely not enough to say that the housing market is starting to recover," he said.

Carbacho-Burgos noted that new home sales have recorded monthly increases several times over the past few years even as the overall trend in sales declined.

"This is only a single month's worth of data," he said. "You need at least three months of increases before you can say the market is recovering."

The report also showed that the median sales price of new houses sold in February was $200,900, down 18% from $245,300 a year ago. That was the biggest year-over-year decline in history, according to real estate analysts at Weiss Research.

The estimated number of new homes for sale at the end of February was a seasonally adjusted 330,000. At the current sales pace, it would take more than a year to sell through that inventory, according to the report.

Wednesday's report was the latest in a series of better-than-expected readings on the housing market. But many analysts remain wary of the prospects for a long-term recovery.

"The worst of the drop in sales is over but a sustained recovery...is a way off still," wrote Ian Shepherdson, chief U.S. economist at High Frequency Economics, in a research note.

On Monday, the National Association of Realtors said that existing home sales rose 5.1% in February to a seasonally adjusted annual rate of 4.72 million units from a rate of 4.49 million in January.

Last week, the Commerce Department reported that initial construction of new homes surged 22% in February to a seasonally adjusted annual rate of 583,000, up from a revised 477,000 in January. It was the first time housing starts increased since June.

Meanwhile, a report from the Mortgage Bankers Association showed Wednesday that the number of Americans applying for home loans jumped 30% last week, driven mostly by applications to refinance existing loans.