Sales of new USA homes unexpectedly jumped in July to the highest level in nearly nine years, led by soaring demand in the nation’s south and adding to signs of persistent housing market strength.
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New-home sales jumped 12.4% last month to a seasonally adjusted rate of 654,000 annual units, the strongest level since October 2007, the U.S. Commerce Department said Tuesday. In July, the median sale price of new houses was $294,600, down half a percent from a year ago.
But construction of new single-family homes has slipped, meaning supply might be falling behind demand.
Sales of new-homes rocketed upwards in July to the highest level since the housing downturn a decade ago.
July’s new home sales came in higher than economists’ expectation of 575,000. Sales in the Midwest and West were roughly flat, month over month.
This, in effect, dragged mortgage rates down demonstrably and has kept them depressed well into August. Housing starts are weak despite sales being up 31.3% from a year ago.
“It’s important to note that new home sales numbers from the U.S. Census are extremely volatile”, he said.
Buyers closed on 1,447 new homes in the quarter, the best three-month period since the Great Recession, said Polito, whose report covered Manatee, Sarasota, Charlotte and a small portion of DeSoto counties.
Indeed, home sales were likely bolstered by mortgage rates that plummeted to near-record lows in July shortly after the United Kingdom announced its Brexit vote. “It shows that the demand for buying homes, both new and existing homes, is there”. The July surge signals that there will be “sustained momentum” from buyers for new properties, according to CNBC. “New homes are the escape valve for limited supply like we’ve been seeing, and with sales of new homes up 13 percent over the first seven months of 2015, we’re definitely going in the right direction”.
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Builders are increasing construction but are still running behind demand.
