Wednesday August 26, 05:41 PM
US new home sales leap 9.6 percent
WASHINGTON (AFP) - Sales of new US homes surged 9.6 percent in July, according to government data Wednesday that showed further signs of recovery in the troubled housing sector.
Sales of new single-family homes rose to a seasonally adjusted annual rate of 433,000, the Commerce Department said. That was well above analyst estimates of 390,000.
Nonetheless, the figure was 13.4 percent below the sales pace of a year ago, and gains came amid price cuts.
The median sales price of new houses sold in July 2009 was 210,100 dollars, down slightly from 210,400 in June and 11 percent below last year's median price.
The average sales price of 269,200 dollars was down 2.7 percent from a month earlier and off 10 percent from a year earlier.
Inventory levels came down in July, reducing the glut of new homes for sale.
The seasonally adjusted estimate of new houses for sale at the end of July was 271,000, a supply of 7.5 months at the current sales rate.
"The improvement in sales is another heartening sign that housing is on the mend," said Celia Chen at Moody's Economy.com.
"The main positive for the new home market is that the exceptionally weak pace of new construction is bringing down inventories of new homes. Months of supply are back down to the mid-2007 level -- still above the natural level, but a decided improvement."
Patrick Newport at IHS Global Insight said the market was helped by tax credits but still remains weak.
"From a builder's perspective, the market for selling new homes is still brutal, despite the recent pickup in demand," he said.
"The question hanging over this report and other recent good news about housing is the impact of the tax credit for first-time homebuyers. As the "cash for clunkers" (auto) program showed, temporary incentives can have powerful effects. After the credit expires at the end of November, sales, starts, and prices will take a hit. The big unknown is how big this hit will be."
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