Americans stepped up their purchases of new homes in July, with sales surging in the Northeast.
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The Commerce Department said on Tuesday sales increased 5.4 per cent to a seasonally adjusted annual rate of 507,000 units.
The continued increase came as a surprise to economists, who had expected existing home sales to drop to a rate of 5.40 million from the 5.49 million originally reported for the previous week.
The housing market is gaining stream, with data last week showing home resales jumped to a near 8-1/2-year high in July and groundbreaking on new home building climbing to its highest level since October 2007.
At the peak in 2005, new home sales posted a seasonally adjusted annual rate of almost 1.4 million. Sales were up 25.8 per cent compared to July of a year ago.
The median sales price of new houses sold in July 2015 was $285,900; the average sales price was $361,600.
In July, 55% of the estimated 43,000 monthly sales were for homes priced at less than $300,000. “The robust improvements in last week’s new housing starts numbers are especially encouraging for new home sales going forward with single-family starts growing at its fastest pace since the recession. In fact, new home sales in the region where at its slowest of the year last month”. Real estate brokerage Redfin said its demand index fell in July for the fourth straight month, while real estate firm Zillow reported that rental prices are rising in many markets where home values are falling on a month-over-month basis. The National Association of Home Builders, an industry group, said home-builder sentiment rose in August to its highest level since November 2005.
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This item was corrected at 10:26 a.m. ET to show that the number of new homes for sale rose, not shrank, slightly in July from a month earlier.
