New home sales jumped to their best reading in seven years- despite concerns about the bad weather. Bobbi Rebell reports.
Great news for home builders. New home sales jumped 7.8 percent to a seasonally adjusted annual rate of 539,000 units last month. The highest level since February 2008. Home builder stocks rose after the data was released. Zillow Chief Economist Stan Humphries: SOUNDBITE: STAN HUMPHRIES, CHIEF ECONOMIST, ZILLOW (ENGLISH) SAYING: "Wow. I mean new home sales just blew the doors off expectations. I was shocked. We were expecting kind of flat to down new home sales because mortgage rates were slightly higher vs. January, but instead we see tremendous growth " And the pipeline of buyers is also looking up. Zillow data shows a big jump in the number of renters who want to buy homes next year- from about 4 million last year to about 5 million this year. So home builders are changing their business model - building more affordable homes in the $200,000 to $300,000 range. SOUNDBITE: STAN HUMPHRIES, CHIEF ECONOMIST, ZILLOW (ENGLISH) SAYING: "They were 12% of the new home sale market last year. They were about 18% this year. So builders have finally, while they have been building for the really affluent in the last few years of the recovery, they have really started to build more homes that are affordable which is going to be great because we are going to need that supply for millenials." Zillow data shows that by the end of 2015, Millennials will edge out Generation X-ers to become the largest source of new home buyers.