US new-home sales rebound in July

Sales of new homes are still around one-third of their July 2005 peak of 1.4 million, and are still significantly below pre-crisis levels.

The U.S. Census Bureau and the Department of Housing and Urban Development reported Tuesday morning that sales of new homes in July rose to a seasonally adjusted annual rate of 507,000, an increase of 5.4% from the downwardly revised June rate of 481,000 and an increase of 25.8% compared with the July 2014 rate of 403,000.

New homes data is volatile and hard to measure.

The continued increase came as a surprise to economists, who had expected existing home sales to drop to a rate of 5.40 million from the 5.49 million originally reported for the previous week. Year-to-date sales are up 21.2% from the same period in 2014. The shortage of listing has enabled the median price to rise 2 percent over the past 12 months to $285,900.

Last Thursday, the National Association of Realtors released a report showing that existing home sales in the US unexpectedly climbed to their highest level in over eight years in July.

The seasonally adjusted estimate of new houses for sale at the end of July was 218,000. “This is especially apparent in the slower sales in the West where inventory is tight with affordability constraints busting at the seams”.

August 25 New U.S. single-family home sales rose a bit less than expected in July, but the trend pointed to housing market strength that should underpin economic growth for the rest of the year.

Several factors could prove bullish for sales of new homes going forward. House prices jumped amid tightening inventory.

This item was corrected at 10:26 a.m. ET to show that the number of new homes for sale rose, not shrank, slightly in July from a month earlier.