February new home sales rise unexpectedly, driven by sales in the West, South

New home sales rebounded -- and jumped 7 percent in the West -- unexpectedly last month, but were still the second-worst on record and remained well below last year's levels, according to data released today.

The results were the first increase since last July. They provided some hope that developers have slashed prices and construction to such a large extent that sales have finally hit bottom and the worst may be past. Prices, however, are likely to remain weak for months as builders continue to clear out their stock of unsold homes.

"We are prepared to hazard the view that the post-Lehman meltdown is now over and the market is stabilizing," wrote Ian Shepherdson, chief U.S. economist at High Frequency Economics, referring to last fall's collapse of investment bank Lehman Brothers and the subsequent Wall Street plunge. "That's not the same as a recovery, but it is better than continued declines in sales."

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