New Home Sales Beat Expectations In August

Sales of newly built single-family homes rose 5.7 percent in August, according to new estimates released by the U.S. Census Bureau and the Department of Housing and Urban Development. The improvement puts new home sales 21.6 percent above last year’s level and represents the fastest sales pace in seven years. After falling in June, sales have rebounded strongly. In fact, August’s report includes an upward revision of July’s estimate, which was initially reported as a 5.4 percent increase. It also surpasses economists’ expectations for the month. New home sales are an important indicator of – not only the health of the housing market – but also the overall economy. Strengthening sales are an indication of increasing economic activity, as well as a more stable job market. But though this summer’s sales gain can, in part, be attributed to improved employment conditions, it is also fueled by mortgage rates that remain low by historical standards. Also in the report, the median sales price of new houses sold in August was $292,700; the average sales price was $353,400. At the current sales pace, there was a 4.7-month supply of new homes available for sale. More here.

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