New Home Sales Pick Up

(CBS)  Along New York's East River, it may not feel like spring, but there's signs of a thaw in the housing market.

After a slow year, developer Michael Dubb is selling more condos, reports CBS News correspondent Priya David.

"We are feeling pretty good right now," Dubb said. "We have absolutely started to see that turn and we are cautiously optimistic."

The number of new homes sold in February is still 41 percent less than last year. But the glut of unsold new homes is being reduced. According to the Commerce Department, new home sales climbed 4.7 percent during February to a seasonally adjusted annual rate of 337,000 - the first month-to-month increase since July. That's a key to stop the slide in housing - which has been at the root of the recession.

"I think what we can say now objectively is that the pace of the contraction will slow as the year progresses," said Laskhman Achuthan, with the Economic Business Cycle Institute.

And with mortgage rates at historic lows below 5 percent, more lenders are offering deals of a lifetime.

In Portland, Ore., Banner Bank recently offered a 30-year fixed rate mortgage at 3.875 percent for borrowers with excellent credit and 20 percent down payments. The bank did it by loaning more than a third of its $124 million in government bailout money.

"That's what it's supposed to be for," said Lenny Severs with Banner Bank. "It was for the banks to turn it around and lend it back into the community and that's what we're doing."

"It's allowed people that were sitting on the sideline to stand up and say, 'Now's the time to buy,'" said Ken Gertz, a home builder.

It's allowed him to reduce inventory and build new homes.

"When we sell homes we go back to work," Gertz said.

Construction has been decimated by this recession. Over one million construction jobs have been lost since January of 2007.

"We had to lay off four or five people," Gertz said. "So I'm hoping to get them back to work."

The trick to that will be building on what many hope is the foundation of a turnaround.

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