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New home sales fall for third consecutive month

SHARE New home sales fall for third consecutive month

WASHINGTON (AP) -- New home sales declined 2 percent in February, the third consecutive drop since they hit a record high last fall.

Americans purchased new homes at a seasonally adjusted annual rate of 881,000 last month, a five-month low and down from 899,000 in January, the Commerce Department said Monday.Though down considerably from the record 985,000 pace in November, the February sales rate was nevertheless considered strong. Sales for the first two months of this year are running 1.4 percent ahead of the same period in 1998.

Low unemployment, strong inflation-adjusted income gains, high stock prices and low mortgage rates are supporting sales.

"Demand remains strong from both first-time homebuyers and in the move-up segment," said economist Lynn Reaser of Bank of America Private Bank in Jacksonville, Fla.