The sale of new single-family homes increased 8.3 percent in June, providing more evidence of the U.S. housing recovery.
The annual rate of sales moved to 497,000 units, the fastest pace in five years, according to data released today by HUD and the U.S. Census Bureau.
"New-home buyers are returning to the market in larger numbers as firming prices, shrinking inventories of homes for sale and improving local economies convince them that now is the time to make their move," said Rick Judson, chairman of the National Association of Home Builders, in a statement.
"Meanwhile, the very low supply of new homes on the market is indicative of the difficulty that builders are having in keeping up with demand due to availability issues with regard to materials, credit, labor and lots for development."
Three out of four regions posted gains in new home sales in June, with only the Midwest posting declines. The Midwest declined 11.8 percent, while the Northeast posted the largest increase at 18.5 percent.
The inventory of new homes for sale declined to 161,000 units in June, a 3.9-month supply at the current sales pace. The supply of homes for sale has not fallen below this level since March of 2004, NAHB reports.
"The takeaway from this report is that the housing recovery is solidly on track and isn't going to be derailed by slightly higher mortgage rates," said NAHB chief economist David Crowe. "After years of fence-sitting, buyers are back and are ready to move forward with an investment in homeownership."