USA Today
June 24, 2004
By: Jeff Bater and Campion Walsh
- New-home sales soared in May to a record level, posting the highest increase in 11 years amid fears of higher mortgage rates.
Single-family home sales rose 14.8% to a seasonally adjusted annual rate of 1.369 million, the Commerce Department said Thursday.
The increase was the sharpest since a 16.4% jump in April 1993 and carried sales to a new record level, the Commerce Department said.
April home sales were revised sharply to reflect a 7.9% decrease to 1.192 million, from an earlier estimated 11.9% decline in demand to 1.093 million.
March sales totaled 1.294 million, revised up from 1.239 million.
Wall Street expected much weaker sales numbers for May. A Dow Jones Newswires-CNBC survey of 20 economists had predicted sales would rise 3% to 1.126 million annual rate.
Lending rates remain relatively low, but have been rising from record levels. Last week, the average 30-year rate crept to 6.32% from 6.3%. Analysts say "fence-sitters" -- buyers entering the market on the belief rates have bottomed amid the rising economy -- are generating demand even as higher financing costs scare off some people. Climbing payrolls and income gains also are giving support to the sector, analysts say.
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