NewHome Sales Reach Best Level Since Late 2007

Dated: 09/08/2016

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Americans stepped up their purchases of new homes in July to the fastest pace in nearly nine years, the latest sign that low mortgage rates and a solid job market are helping support the residential real estate market.

New-home sales jumped 12.4 percent in July to a seasonally adjusted rate of 654,000 annual units, the strongest level since October 2007, the Commerce Department said recently. The demand has eclipsed the pace of construction. Just 4.3 months' supply of new homes is available on the market, down from 5.2 months a year ago.
Construction of single-family houses has picked up this year as the market has extended its recovery from the drop-off caused by the housing meltdown that began nearly a decade ago. Sales in July roughly matched the long-standing pace of 650,000 new homes selling each year. As the job market has strengthened and mortgage rates have settled near all-time lows, more buyers have been drawn to new developments and properties.
The improved sales of both new and existing homes has supported the broader U.S. economy, which is still hampered by a global slowdown and weak worker productivity. Existing-home sales reached a seasonally adjusted annual rate of 5.57 million in June, the best performance since early 2007.
Construction companies have added 215,000 jobs over the past 12 months. Over the same period, sales have risen 3.5 percent at building materials stores and 4.3 percent at furnishing stores, according to the government.
July's median sales price dipped 0.5 percent from a year ago to $294,600, a possible reflection of the regional sales mix. So far this year, new-home sales have climbed 12.4 percent to 352,000.
Overall, the outlook for the real estate market remains positive at this time.

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