WASHINGTON — A surprisingly strong pace of new home sales last month has boosted hopes that the spring buying season will be solid enough to lift the overall economy.
Sales of new homes rebounded in January to the fastest rate in more than five years. The strength in purchases followed a slowdown that had been linked to higher mortgage rates and severe winter weather.
The report Wednesday from the Commerce Department helped support stock prices, especially shares of home builders.
Many economists predict that sales of both new and existing homes will rise in 2014, lifted by an improving economy and steady job growth.
Sales of new homes rose 9.6 percent in January to a seasonally adjusted annual rate of 468,000. It was the fastest pace since July 2008.
Most economists had expected a decline in January, in part because they thought sales would be held back by winter storms. Sales had fallen 3.8 percent in December and 1.8 percent in November.
Residential construction has grown at double-digit rates over the past two years and contributed about one-third of a percentage point to overall economic growth last year.