New home sales in July reached the highest level so far this year, according to estimates released by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.
What’s more, the rate of new home sales in July was the highest it has been since October 2007.
As of the end of July, new home sales were at a seasonally adjusted annual rate of about 654,000, an increase of 12.4% compared with the revised rate of about 582,000 in June and an increase of 31.3% compared with about 498,000 in July 2015.
The median sales price of new single-family homes sold in July was $294,600; the average sales price was $355,800.
Inventory, however, remains tight: As of the end of the month, there were about 233,000 new homes for sale across the country. That’s about a 4.3-month supply at the current sales rate.
“This rise in new home sales is consistent with our builders’ reports that market conditions have been improving,” says Ed Brady, chairman of the National Association of Home Builders (NAHB), in a statement. “As existing-home inventory remains flat, we should see more consumers turning to new construction.”
“July’s positive report shows there is a need for new single-family homes, buoyed by increased household formation, job gains and attractive mortgage rates,” adds Robert Dietz, chief economist for NAHB. “This uptick in demand should translate into increased housing production throughout 2016 and into next year.”
Regionally, new home sales rose by 40% in the Northeast, 18.1% in the South and 1.2% in the Midwest. Sales were flat in the West.