US sales of new homes rebounded in January to the fastest pace in more than five years, offering hopes that housing could be regaining momentum after a slowdown last year caused by rising interest rates. The Commerce Department says sales of new homes increased 9.6% in January to a seasonally adjusted annual rate of 468,000. That was the fastest pace since July 2008.
It came as a surprise to economists who had been forecasting a sales drop in January, in part because of a belief that activity would be held back by bad winter storms in many parts of the country. Sales had fallen 3.8% in December and 1.8% in November, leading to worries that the housing recovery could be losing momentum. (Read more housing market stories.)