Rise in new home sales points to continuing housing recovery

“Home buyers are taking advantage of historically low mortgage rates, and pent up demand from years of a slow housing recovery”.

Still, the figure is a far cry from the historic average: the average monthly number of new home sales over the last 30 years is 706,000 according to Peter Boockvar, chief market strategist at the Lindsey Group.

The rate was the strongest pace since back in February of 2008, near the start of the Great Recession.

August’s increase follows an even larger jump in July, according to revised figures from the government.

Sales for July were also revised up to a 522,000 rate from 507,000, the Commerce Department said Thursday. Still, the numbers this time have been mostly encouraging as described by most economists.

Surveys show that homebuilders’ outlook is the most optimistic in a decade, a sign that construction could pick up.

Further improvement in new home construction and sales could accelerate economic growth. Sales of new homes totaled 414,000 during 2014. But builders have reined in price increases this year, fueling more buyer traffic and purchases. Almost 3 million more Americans have found jobs in the past year and mortgage rates remain low by historical standards.

While home purchases have improved in 2015, Federal Reserve Chair Janet Yellen last week said housing remains “very depressed” considering demographic and employment strength that should be providing more support to the real-estate market.

Right now, however, potential buyers are facing fewer choices than would normally be the case. Annual increases were all double-digit, ranging from 21.6 percent to 11.4 percent in the West. Meanwhile, sales declined 9.1 percent in the Midwest.