Purchases of new single-family homes rose in June to the highest level in more than eight years, indicating a firm and resilient housing market.
Sales increased 3.5% to a 592,000 annualized pace, the fastest since February 2008, Commerce Department data showed Tuesday in Washington. Figures for May were revised higher. The median forecast in a Bloomberg survey called for a 560,000 rate.
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.
"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."
Estimates in the Bloomberg survey of economists ranged from 525,000 to 575,000. The Commerce Department revised the May reading to a 572,000 pace from a previously estimated 551,000.
The report said there was 90% confidence the
The pickup in demand last month was led by a 10.9% increase in the West. In the Midwest, sales jumped 10.4% to an 85,000 annualized rate, the strongest since November 2007. Purchases eased in the South and Northeast.
The gain in sales pushed down the supply of homes to 4.9 months, the lowest since February of last year, 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.
The median sales price of a new house advanced 6.1% from June 2015 to $306,700. The gain reflected more purchases of homes valued between $400,000 and $500,000. Eighteen percent of the homes sold in June, the biggest share since September, were in that price range.
New-home sales, which account for about 10% of the residential market, are tabulated when contracts are signed. That makes them a timelier barometer than transactions on existing homes.
Previously owned home purchases unexpectedly climbed in June to the strongest level in more than nine years, helped by first-time buyers who made up their greatest share of sales since July 2012, National Association of Realtors data showed last week. Closings advanced 1.1% to a 5.57 million annual rate.
The residential real estate market is being supported by gradually increasing wage growth, steady job gains and mortgage rates near historical lows, while limited inventory is hampering affordability by boosting asking prices.
The average rate on a 30-year, fixed mortgage was 3.45% in the week ended July 21, close to the record-low 3.31% reached in 2012, according to Freddie Mac figures dating to 1971.
