Sales of new homes in the US soared to their highest level since December 2006 in July as Americans took advantage of historically low interest rates.
Single-family home sales leaped 13.9% to a seasonally adjusted annual rate of 901,000 units, according to data released by the US Census Bureau on Tuesday. Median sales price gained 7.2% to $330,600 from the year-ago period.
Economists surveyed by Bloomberg expected a rate of 790,000 sales.

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The seasonally adjusted estimate for new houses for sale at the end of the month was 299,000, according to the Census Bureau. That level represents a four-month supply of homes should the sales rate hold steady.

Sales jumped the most in the Midwest, soaring 58.8% to 127,000 units. Home sales shrank in the Northeast by 23.1% to 40,000 units.
The summer sales boom was largely fueled by low borrowing costs and a lack of listings for existing homes. Mortgage rates sank through July before hitting record lows in early August. Surging homebuilding activity further fueled the spree, but July’s rate is likely unsustainable and could cave to a weakened economic backdrop, Oxford Economics said in a note. . . .

The better-than-expected data follows a similarly positive report on existing home sales. Sales of previously owned homes spiked a record 24.7% to a seasonally adjusted rate of 5.86 million last month, according to a Friday release from the National Association of Realtors. Economists anticipated a 5.41 million rate.

(Excerpt from Business Insider. Article by Ben Winck. Photo Credit: Flickr.)

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