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New Home Sales Hit Post-Recession High08-04-16 | News

New Home Sales Hit Post-Recession High
Buys Surge 25.4 Percent Year-Over-Year

Sales of new homes climbed 3.5 percent in June on a monthly basis, but jumped more than 25 percent when compared to June 2015.

New home sales are at a post-recession high and at their best level since February 2008, authorities in the real estate industry and economists said.

New home sales in the U.S. surged by 25.4 percent year-over-year, Census Bureau data for the month of June show. In fact, compared to June 2015, all four regions of the nation saw sizable double-digit hikes: Midwest, 44.1 percent; Northeast, 30.8 percent; West, 24.6 percent; South, 21.1 percent.

Total new home sales in June were also 3.5 percent better than the previous month and easily beat a consensus estimate.

"For much of the recovery, sales of existing homes outperformed new home sales as builders largely held back or focused on smaller, more upscale projects," the real estate firm Zillow said on its website. "That is starting to shift, which will hopefully help ease critically low inventory of homes for sale overall and give buyers at least modestly more choices."

"With six months of data in the books, new home sales appear to be on pace for a solid 2016," the Wells Fargo Economics Group said. In the first six months of 2016, new home sales are 10.1 percent above the level of the same time frame of a year ago.

"June's solid report follows a string of positive data for the U.S. housing market," the economists added. "Existing home sales reached a post-recession high in June, new home construction continues to edge higher and homebuilder sentiment has remained at a solid level. Low mortgage rates and favorable residential credit conditions also remain supportive for further sales gains."

Home sales could probably have been better had it not been for a serious shortfall of available homes for sale. Inventory levels remain tight, and both the median and average sales prices of single-family homes are up more than 6 percent over the past year.