Business Briefs: New home sales rise despite higher rates

Business Briefs: New home sales rise despite higher rates

March 24th, 2017 by Staff Report in Business Around the Region

New home sales rise despite higher rates

Americans responded to higher mortgage rates by snapping up new homes in February at the fastest pace since July.

New-home sales rose 6.1 percent month-over-month to a seasonally adjusted annual rate of 592,000, the Commerce Department said Thursday. That sales pace is nearly 13 percent higher than February of last year, a positive sign for the housing market that demand is robust at the start of the spring home-buying season.

Healthy job growth and a recovering economy have pushed up interest in new homes, while the prospect of rising mortgage rates since the November presidential election may have pulled some sales forward.

Long-term mortgages drop to 4.23 percent

Long-term U.S. mortgage rates slid this week from their highest levels of 2017.

Mortgage buyer Freddie Mac said Thursday the rate on 30-year, fixed-rate home loans fell to 4.23 percent from 4.30 percent last week. The benchmark rate stood at 3.71 percent a year ago and averaged 3.65 percent in 2016, lowest in records dating to 1971.

The rate on 15-year mortgages tumbled to 3.44 percent from 3.50 percent.

Last week's rates were the highest of 2017.

Ford reduces forecast due to lower sales

Ford Motor Co. says its first-quarter earnings will be about 50 percent lower than last year because of increasing costs and lower sales.

In a call with investors, the company said it expects to earn between 30 and 35 cents per share in the first quarter. That's down from 68 cents a year ago.

The forecast fell short of analysts' expectations. Analysts polled by FactSet had forecast earnings of 47 cents per share.

Ford's shares fell 1 percent to $11.64 in morning trading.

Ford will release its full first-quarter earnings next month.

Chief Financial Officer Bob Shanks said lower sales and increased costs of engineering electric and self-driving vehicles will impact earnings in the first quarter.

Ford expects to earn $9 billion in 2017, down from $10.4 billion in 2016.