Purchases of new U.S. single-family homes rose in June to the highest level in more than eight years. Sales increased 3.5 percent, the fastest since February 2008, according to Commerce Department data published Tuesday in Washington.
While the government’s new-home purchase data are subject to big swings from month to month, the broader picture for residential real estate shows steady gains fueled by stable employment and low borrowing costs. Faster wage growth and construction of properties priced for entry-level buyers have the potential of further stoking the market.
Bloomberg.com reports, “The grinding recovery continues,” said Brett Ryan, a U.S. economist at Deutsche Bank Securities Inc. in New York. “The fundamental underpinnings are still really supportive for housing, so it should be a steady contributor to growth over the next year or so.”
June's uptick was led by a 10.9 percent increase in the West and a10.4 percent increase in the Midwest. The Midwest's 85,000 new home sales figures were the strongest since November 2007.
Construction of single-family houses has increased, rising 4.4 percent to a seasonally adjusted annual rate of 778,000 in June.
Data show the gain in sales pushed down the supply of homes to 4.9 months, the lowest since February 2015, from 5.1 months in May. There were 244,000 new houses on the market at the end of June, compared with 241,000 in the prior two months.
Median sales prices of new houses advanced 6.1 percent from June 2015 to $306,700.