US new home sales surge to 12.5-year high in January

The Commerce Department said on Wednesday new home sales jumped 7.9% to a seasonally adjusted annual rate of 764,000 units last month, the highest level since July 2007. Housing market strength could help keep the economic expansion, now in its 11th year, on track. The sector, which accounts for about 3.1% of GDP, is being supported by cheaper mortgage rates after the Federal Reserve cut interest rates three times last year. CNBC’s Diana Olick reports.