US new-home sales dipped in February, but demand is solid

WASHINGTON (AP) — Sales of new U.S. homes slipped 0.6 percent in February, a third straight monthly decline. But year to date, sales are up 2.2 percent compared with 2017 in a sign that buyer demand remains solid.

The Commerce Department said today last month's sales came in at a seasonally adjusted annual rate of 618,000, down from 622,000 in January and 653,000 in December.

Home buyers at the start of the spring purchase season are generally finding higher prices and fewer properties available. Those factors, along with rising mortgage rates, have suggested that home ownership is becoming less affordable. The shortage of existing homes on the market is intensifying competition among would-be buyers of newly built houses.

But buyers seem undeterred so far about the lack of available homes, given the low unemployment rate and wave of younger millennials who are entering the real estate market.

"The demand for new homes should continue to rise with a solid job market, modestly accelerating wages and positive demographics," said David Berson, chief economist for Nationwide Insurance.

Last month's decline came largely from a 17.6 percent drop-off in new homes sold in the West. New-home sales fell in the Midwest but climbed in the Northeast and South. The median sales price of a new home climbed nearly 10 percent from a year ago to $326,800.