U.S. new home sales continued to surge in August, as buyers took advantage of low interest rates and better employment.
New home sales rose 5.7% at an annual rate of 552,000 in August, according to the Census Bureau.
The increase smashed analyst expectations and was the highest number of new homes sold since February 2008.
Economists had forecast that new-home sales rose only 1.6% last month to a seasonally adjusted annual rate of 515,000.
It’s yet another sign that the housing market has been heating up this summer after a lull in June. In July, new home sales jumped 5.4 percent to 507,000, reversing a sharp drop the previous month.
September is looking good, as well. Total application volume surged 13.9 percent on a seasonally adjusted basis for the week ended September 18 versus the earlier week, according to the Mortgage Bankers Association (MBA).
According to the MBA, last week’s average mortgage loan rate for a conforming 30-year fixed-rate mortgage remained unchanged last week at 4.09%.
Other reports say banks are offering rates as lowas 3.75%.
“We are envisioning further improvement in the housing market,” Fed Chair Janet Yellen said at press conference last week. “It remains very depressed.”
Buyers prefer brand new homes to existing homes, whose prices are rising all the while needing improvements.
Sales of existing homes fell 4.8 percent in August from the previous month, to a seasonally adjusted annual rate of 5.31 million, the National Association of Realtors said on Monday.
The material has been provided by InstaForex Company – www.instaforex.com