Sales of New Homes in U.S. Rose More Than Forecast

Purchases of new houses in the U.S. rose more than forecast in December, propelled by a record surge in the West as buyers in California may have rushed to qualify for a state tax credit before it expired.

Sales climbed 18 percent to a 329,000 annual pace, figures from the Commerce Department showed today in Washington. The percentage gain was the biggest since 1992, and was led by a record 72 percent jump in the West.

“The increase being driven by the West definitely looks suspicious,” said Daniel Silver, an economist at JPMorgan Chase & Co. in New York. “New-home sales are definitely lagging behind other economic indicators. As we see job growth and signs of economic stability, the housing market will improve, but when that will happen is hard to say.”

Following the industry’s worst year on record, builders may keep facing competition from a growing glut of foreclosed existing homes that is depressing prices. The lack of a sustained housing rebound and unemployment above 9 percent are among reasons Federal Reserve policy makers today are expected to press on with a second round of stimulus that will pump $600 billion into financial markets by June.

Stocks rose after the report. The Standard & Poor’s 500 Index climbed 0.4 percent to 1,296.42 at 10:17 a.m. in New York. The S&P Supercomposite Homebuilder Index jumped 2.6 percent.

The median estimate of 79 economists surveyed by Bloomberg News called for a rise to 300,000. Estimates ranged from 270,000 to 315,000. Last month’s sales pace was the highest since April. The Commerce Department revised November purchases down to 280,000 from a previously reported 290,000 rate.