U.S. new home sales rise at fastest pace since 2007

Demand has eclipsed the pace of construction.

Sales of US new homes rose in July to the highest level since October 2007, as the USA housing market enjoyed a stable growth this year.

On Tuesday, Aug. 23, 2016, the Commerce Department reports on sales of new homes in July.

“You’re seeing finally that builders are responding with more supply, and that’s been one of the big problems in the current cycle”, Ryan said.

Construction of single-family houses has picked up this year, a sign that builders see more buyers in the months ahead as mortgage rates have held near historic lows and unemployment hovers at a healthy 4.9 percent.

New home sales in the US unexpectedly saw a substantial increase in the month of July, according to a report released by the Commerce Department on Tuesday. The report has increased projections of home sales for near future. Through July, there were 782 permits to build new homes issued in the four counties, compared with 676 a year earlier, according to data from MTD Marketing Services of Wisconsin Inc.

The median price of a new home was $294,600, down 5.1% from June. In Milwaukee, Ozaukee, Washington and Waukesha counties, permits to build new homes were up nearly 16% from the first seven months of 2015.

It’s not just new home sales that are rising.

The seasonally adjusted estimate of new homes for sale in July was 233,000 units, which represented a 4.3-month supply, the Census Bureau reported.

New home sales are likely benefiting from a chronic shortage of previously owned houses available for sale. A lack of supply will also raise the pressure for construction starts to be scaled up.

The increase in demand in July included an 18.1 per cent jump in the South to a 398,000 rate, the highest since July 2007.

“This reminds us that goods production in the economy isn’t going quite as well as housing”, said Steve Blitz, chief economist at M Science in NY.