According to the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, sales of newly built, single-family homes in the U.S. rose 12.4 percent in July 2016 from a downwardly revised June reading to a seasonally adjusted annual rate of 654,000 units. This is the highest reading in almost nine years.
"This rise in new home sales is consistent with our builders' reports that market conditions have been improving," said NAHB Chairman Ed Brady. "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," said NAHB Chief Economist Robert Dietz. "This uptick in demand should translate into increased housing production throughout 2016 and into next year."
The inventory of new homes for sale was 233,000 in July, which is a 4.3-month supply at the current sales pace. The median sales price of new houses sold was $294,600.
Regionally, new home sales rose by 40 percent in the Northeast, 18.1 percent in the South, and 1.2 percent in the Midwest. Sales remained unchanged in the West.
"New home sales are finally surging, rising to the highest level since 2007 and it's great to see evidence of much-needed growth and a shift toward more affordable prices in July's report. New homes are the escape valve for limited supply like we've been seeing, and with sales of new homes up 13 percent over the first seven months of 2015, we're definitely going in the right direction. It's also good news that we are finally seeing builders shifting toward more affordable price points. And given the limited number of homes currently for sale, we can be confident that the decline in new home prices is a result of market shift and not discounting by builders", said Realtor.com Chief Economist Jonathan Smoke.