New home sales in the United States in July increased to their highest level in nearly a decade, with sales of new single family homes up 12.4% month on month.
This was the highest level since October 2007 with new home sales up 40% in the Northeast, up 18.1% in the South, up 15.6% in the West and up 1.2% in the Midwest, according to the data from the Commerce Department.
New home sales have posted strong gains since the beginning of this year, up 13.3% compared to a year ago. In June, sales of existing homes also reached their strongest pace in nearly a decade, though they slipped in July, according to the National Association of Realtors.
‘July’s positive report shows there is a need for new single family homes, buoyed by increased household formation, job gains, and attractive mortgage rates,’ said Robert Dietz, chief economist for the National Association of Home Builders.
‘The uptick in demand should translate into increased housing production throughout 2016 and into next year,’ he added.
However, while new home sales have posted strong gains, they remain far below the peak set in July 2005 of 1.39 million. In fact, July is the first month since early 2008 that new home sales have climbed above the 600,000 mark.
The data also shows that the median sales price of a new home in July was $294,600, down from $296,000 a year earlier and there was a 4.3 month supply of new homes available by the end of July, which is the fewest number of homes for sale in three years.
