Buoyed by steady job gains and low mortgage rates, Americans purchased new homes in August at the fastest pace in more than seven years.
Healthy hiring and smaller price increases for new homes have finally begun pushing up sales, which were hammered during the Great Recession. New home sales soar nearly 22 percent in the past year.
Strong gains in new home sales could accelerate the economy by boosting home building, which generates construction jobs, demand for more building materials and more spending on landscaping and other services.
The Commerce Department says new-home sales surged 5.7 percent last month to a seasonally adjusted annual rate of 552,000. That followed an even bigger 12 percent jump in July, according to the government’s revised figures, and the best monthly figure since February 2008. It’s an encouraging sign of the housing market’s momentum, despite some signs point to the year’s overall housing first half year surge is slowing due to rising home prices and limited supply.
New home sale was a nearly 6 per percent increase from July, which was also revised up, by Census Bureau. Still, the figure is a far cry from the historic average.
Annualized Seasonally Adjusted New Home sales:
July 2015: 522,000 (revised)
June 2015: 481,000
May 2015: 521,000
April 2015: 508,000
March 2015: 485,000
February 2015: 545,000
January 2015: 521,000
December 2014: 495,000
November 2014: 449,000
October 2014: 472,000
September 2014: 459,000
August 2014: 454,000
July 2014: 403,000
The average monthly number of new home sales over the last 30 years has averaged 706,000 units sold. Last week’s figure was encouraging, but we’ve got a long way to go, before seeing a full recovery.
Some economists believe there could be an uptick in home buying as would-be homeowners try to lock in a low mortgage rate before the Federal Reserve raises interest rates.
The average rate on a 30-year fixed mortgage in August was 3.9 percent, very low on a historical basis. A decade ago the rate was about 5.8 percent and 20 years ago it was 7.8 percent. When the Fed raises rates, the expectation is that rates on mortgages will gradually move up too.
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