Friday, March 2, 2007

Surprise Stats for New Home Purchases

The Commerce Department announced that new home sales in April 2006 increased by 4.9 percent to a seasonally adjusted rate of 1.198 million units. This was the highest rate since December 2005. Economists had been expecting a decline in sales, primarily due to increasing mortgage rates which are at the highest level in four years.

Interest rates on thirty year Freddie Mac mortgages climbed to 6.6% following the Fed’s May 2006 hike. This could be part of the typical spring boom.

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