July New Home Sales Jump 12.4%

New home sales took off in July, HUD and the Census Bureau reported yesterday, jumping by 12.4 percent from June and by more than 31 percent from a year ago.

The report said new single-family home sales came in at a seasonally adjusted annual rate of 654,000 in July, the highest level since 2007, 12.4 percent higher than June’s revised rate (582,000, from 592,000) and 31.3 percent higher than a year ago (498,000).

Regionally, only the West faltered, with sales unchanged at 137,000 units, seasonally adjusted, stemming from tight inventories. From a year ago, sales in the West rose by 11.4 percent. In the South, sales rose by a solid 18.1 percent to 398,000 units in July, the highest level in more than a year, from 337,000 units and June and rose by nearly 40 percent from a year ago. In the Northeast, sales rose by 40 percent to 35,000 units in July from 25,000 in June and improved by 25 percent from a year ago. In the Midwest, sales rose by 1.2 percent to 84,000 units in July from 83,000 in June and improved by 35.5 percent from a year ago.

Mark Vitner, senior economist with Wells Fargo Securities, Charlotte, N.C., said strong job growth, low mortgage rates and increased construction brought buyers back in droves, with the largest region, the South, leading the way.

“Momentum is finally shifting back toward the new home market, particularly in the South, which has seen job growth surge this past year,” Vitner said. “The South accounts for well over half of all new home sales and has seen sales and new construction take off this year as job growth and in-migration have strengthened.”

The median sales price of new houses sold in July was $294,600, down slightly from June; the average sales price was $355,800, up slightly. The seasonally adjusted estimate of new houses for sale at the end of July fell to 233,000 from 240,000 in June, representing a supply of 4.3 months at the current sales rate.