Thursday, October 3, 2013

New home sales in U.S. jump to highest level in 5 years


Washington — Americans snapped up new homes in June at the fastest pace in five years, a sign the housing recovery is strengthening.

Sales of newly built homes rose 8.3 percent last month to a seasonally adjusted national annual rate of 497,000, the Commerce Department said Wednesday. That’s the highest since May 2008 and up from an annual rate of 459,000 in May, which was revised lower.

While sales are still below the 700,000 pace consistent with healthy markets, they have risen 38 percent in the past 12 months. That’s the biggest annual gain since January 1992.

One concern is that rising mortgage rates could slow sales in the coming months. The average rate on the 30-year fixed was 4.37 percent last week — a full percentage point higher than in early May. At the same time, mortgage applications to purchase homes have fallen in the past few weeks.

Rising demand and a tight supply of available homes for sale have pushed up prices. The median price of a new home in June was $249,700, up 7.4 percent from a year ago — 10 percent in Michigan, or $80,000, according to real estate research firm RealtyTrac.

 imited homes on the market have kept sales from rising even faster. Still, higher prices, growing sales and the tight supply have made builders more optimistic about their prospects. That’s led many to ramp up construction and add jobs.

Builder confidence rose in July to the highest level in seven years, according to a NAHB survey. And customer traffic and builders’ outlook for single-family home sales over the next six months are at the highest levels since the housing bubble burst in 2006.


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