Sales of new single-family homes rose to a 592,000 annual rate in June, the federal government reported Tuesday, the strongest pace since 2008.
Economists in the private sector had expected sales to rise from a 551,000 rate in May to 562,000 in June.
Instead, the Census Bureau and Department of Housing and Urban Development reported, sales zoomed 3.5 percent month-over-month, and were up nearly a quarter from the previous year. Meanwhile, the numbers for May were also revised upward, to a 572,000 clip.
Although new home sales are only a small part of the overall housing market, and the figures are volatile and subject to revision, investors and policymakers watch the monthly numbers because they provide a sense of demand for new housing and of the strength of the construction industry.
“You have to be pretty confident to buy a new home, so soaring sales counts as an indicator of confidence as well,” Chris Rupkey, an economist at MUFG Union Bank, wrote in reaction to Tuesday’s release. He added that “all is going right for the economy at the moment with new homes in demand and confidence holding at levels showing the consumer does not see all that much uncertainty out there despite some worrying global news headlines and the zinging arrows of presidential election year politics.”
New home sales are not the only encouraging sign from the housing market. Sales of existing homes rose in June to a 5.6 million annual pace, the National Association of Realtors said last week, the strongest rate of the economic cycle. Meanwhile, construction on new homes jumped 4.8 percent in June, the Census Bureau reported last week.
Single-family home sales have grown by around 25 percent all over the country, but have been particularly strong in the Midwest. According to the figures released Tuesday, the pace of sales in the Midwest has grown fully 44 percent in the past year.
