New home sales hit their highest level in more than eight years in June, a sign that the housing market is maintaining a healthy level of growth.
Sales of newly built, single-family homes increased 3.5 percent last month to a seasonally adjusted annual rate of 592,000 units up from 572,000 in May, the best showing since February 2008, according to the Commerce Department on Tuesday.
{mosads}”The fact that new home sales reached their highest pace in over eight years shows the housing market is gaining momentum,” said Robert Dietz, chief economist for the National Association of Home Builders (NAHB).
“The market should continue to firm throughout the year, propelled by low mortgage interest rates and solid growth in employment,” Dietz said.
Sales are is 25.4 percent above the June 2015 estimate.
In the first six months of the year, sales rose 10.1 percent in the first six months of the year compared with the same period of 2015.
Additionally, new home sales are up 9.3 percent in the April-June quarter compared with the first three months of the year.
“This positive report is in line with our forecast for a gradual recovery of the housing market,” said NAHB Chairman Ed Brady, a home builder and developer from Bloomington, Ill.
“For builders to meet the increasing demand for housing, we need to address supply-side headwinds such as shortages of lots and labor,” Brady said.
Home sales have been gradually improving behind a strong job market and low mortgage rates.
The inventory of new homes for sale was 244,000 in June, representing a 4.9-month supply at the current sales pace.
The median sales price of new houses sold was $306,700 while the average sales price was $358,200.
Regionally, new home sales rose by 10.9 percent in the West and 10.4 percent in the Midwest. Sales fell by 0.3 percent in the South and 5.6 percent in the Northeast.