May New Home Sales at Record High

WASHINGTON D.C. ?EUR??,,????'??+ New-home sales surged by 14.8 percent in May to a seasonally adjusted annual rate of 1.37 million, an all-time monthly high, according to data released Thursday by the Commerce Department. The showing, which was stronger than analysts expected, came after sales sagged by 7.9 percent in April.

An improved job climate is helping to offset a recent rise in mortgage rates, which still remain low by historical standards.

By region, sales in the Northeast skyrocketed by 53.2 percent in May from April to an annual rate of 121,000, the highest level since January 1989. In the South, sales rose to a record high rate of 663,000, representing a 20.3 percent increase from April. Sales climbed by 6.5 percent in the West to a pace of 379,000. But in the Midwest, sales were flat in May at a rate of 206,000.

Applications for loans to buy homes rose slightly last week, the Mortgage Bankers Association reported on Wednesday. While applications for refinancing slipped, bids to buy new homes rose, a trend that reflects demand for homes despite a pattern of rising interest rates for mortgage loans.

U.S. housing starts fell 0.7 percent in May, less than expected, and permits rose to a 30-year high. U.S. 30-year fixed rate mortgages rose slightly last week to 6.32 percent, mortgage finance giant Freddie Mac said.