Dive Brief:
- New single-family home sales soared 12.4% between June and July to a seasonally adjusted annual rate of 654,000, the Commerce Department reported Tuesday. July's rate was 31.3% higher than the rate of new home sales in July 2015.
- July's new home sales pace marked the strongest rate since October 2007. The median sales price of new homes sold last month was $294,600, down from $306,700 in June.
- July sales increased 40.0% in the Northeast, 18.1% in the South, and 1.2% in the Midwest, while they remained unchanged in the West.
Dive Insight:
New home sales, which represent approximately 10% of all home sales, walloped expectations, as economists surveyed by Reuters predicted they would slide to a 580,000 rate.
Experts have attributed the unexpectedly strong growth in new sales last month to low mortgage rates and an improving job market. The July surge signals that there will be "sustained momentum" from buyers for new properties, according to CNBC.
With increasing sales and housing starts figures, it seems that builders are starting to feel more secure adding inventory to the current limited stock of available homes. That trend was reinforced last week, when reports found that housing starts rose 2.1% in July and builder confidence bumped up two points.
Tuesday's report will be followed by existing home sales Wednesday and pending home sales Aug. 31.
