Tags: us | new home | sales | july | mortgage | interest rates

US New Home Sales Rise to 650K in July, Highest Level in Nearly Decade

Image: US New Home Sales Rise to 650K in July, Highest Level in Nearly Decade

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By    |   Wednesday, 24 Aug 2016 09:14 AM

U.S. new home sales surged to a nine-year high in July, raising hope that economic growth is on the rise.

"A very rosy picture is beginning to emerge on the housing market, pointing to sustained buoyancy in the sector's recovery, which remains one of the few bright spots for the U.S. economy," Millan Mulraine, deputy chief economist at TD Securities in New York, told Reuters.

July marked the fifth consecutive rise in new home sales, with a seasonally adjusted annual number of 654,000 homes sold in the month. New home sales are up 12.4 percent from the previous month and have marked the highest number since October 2007, Reuters said, citing a Commerce Department report.

The number, which was 31.3 percent above the same time last year, beat economists' expectations of 580,000 new home sales.

"This is a continued sign that demand for new homes remains solid in a low interest rate, low unemployment environment," Ralph McLaughlin, economist at real estate website Trulia told The Wall Street Journal.

The Journal noted that mortgage rates were down about half a percentage point from a year ago to an average of 3.48 percent for a 30-year fixed rate mortgage at the end of July.

New home sales make up about 10 percent of the overall housing market.

New home sales peaked in July 2005 at 1.39 million.

Sales were strongest in the southern US, which showed an 18.1 percent jump, Bloomberg reported. The month also saw an increase in new homes valued at under $300,000.

The median home price in July was $294,600, and the average was $355,800, USA Today reported.

"The year-over-year change is statistically significant, indicating the surge in sales can be taken with more than just a grain of salt," McLaughlin told USA Today.

While the report indicates robust demand, the supply of new homes fell to 4.3 months in July, raising the possibility of increased prices if construction doesn't pick up, USA Today explained, noting that the benchmark for a balanced market is six months of supply.

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U.S. new home sales surged to a nine-year high in July, raising hope that economic growth is on the rise.
us, new home, sales, july, mortgage, interest rates
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2016-14-24
Wednesday, 24 Aug 2016 09:14 AM
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