Associated Press writer Josh Boak reported yesterday that, “Americans stepped up their purchases of new homes in July to the fastest pace in nearly nine years, the latest sign that low mortgage rates and a solid job market are helping support the residential real estate market.
“New-home sales jumped 12.4 percent last month to a seasonally adjusted rate of 654,000 annual units, the strongest level since October 2007, the Commerce Department said Tuesday. The demand has eclipsed the pace of construction. Just 4.3 months’ supply of new homes is available on the market, down from 5.2 months a year ago.”
The AP article added that, “The improved sales of both new and existing homes has supported the broader U.S. economy, which is still hampered by a global slowdown and weak worker productivity. Existing-home sales reached a seasonally adjusted annual rate of 5.57 million in June, the best performance since early 2007.”
As the pace of new home sales increases, recall that that The Wall Street Journal reported earlier this week, that due to the unusual nature of the current U.S. housing recovery, “with very low inventories of homes for sale, often leading to price appreciation and bidding wars—has prompted many homeowners to stay put and improve the home they already have.”
