Sales of new single-family homes soared 13.9 percent in July to a seasonally adjusted annual rate of 901,000 and the highest level in almost 14 years, according to estimates by the U.S. Census Bureau and the Department of Housing and Urban Development. Compared to a year ago, sales surged 36.3 percent.
The phenomenal increase stunned economists who were expecting a moderate increase of 1.2 percent to a rate of 785,000 in July.
“New single-family home sales surged in July, as housing demand was supported by low interest rates, a renewed consumer focus on the importance of housing, and rising demand in lower-density markets like suburbs and exurbs,” said Robert Dietz, chief economist for the National Association of Home Builders.
The median sales price rose to $330,600 and the average sales price was $391,300 in July. Inventory at the end of the month was 299,000 units representing a supply of 4.0 months at the current sales rate.
Sales were strongest in the Midwest with sales rocketing 58.8 percent month-over-month, followed by the South up 13 percent and the West up 7.8 percent. Sales fell by 23.1 percent in the Northeast. All regions increased substantially from a year ago.
“The gains for new home sales are consistent with the NAHB/Wells Fargo HMI, which equaled a data series high in August, demonstrating that housing is the leading sector for the economy,” added Dietz. “Consider that despite double-digit unemployment, new home sales are estimated to be 8.0 percent higher for the first seven months of 2020 compared to the first seven months of 2019.”
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