In the face of a multi-year low mortgage rate coupled with a flurry of quick exits from the densely populated cities to the suburbs and countryside of the United States amid a stubborn rise in pandemic cases, sales of new homes rose again last month as the US housing market had continued to regain momentum.
In factuality, a report released by the US Commerce Department earlier on Tuesday had unveiled that the sales of new homes in July had witnessed a torrential sparkling of 13.9 per cent, while July’s gain had stoked the sales of new homes to a seasonally adjusted reading of 901,000 units on an annualized basis, remarking its highest level in more than 13 years.
Besides, as the US new homes sales in July had beaten an analysts’ estimates by far following large-scale gains in May and June, US housing market had also been witnessing a shortage in supplies, which in effect had led to an increase in US homes, while US home prices data released on Tuesday had unveiled that the prices of new homes in the United States rose by 3.5 per cent last month compared to the same time a year earlier.
US new homes sales surge in July as housing market gathers momentum
In tandem, latest set of upbeat US housing market data from the US Commerce Dept.
comes over the heels of a National Association of Realtors report last week that said the sales of existing homes climbed 24.7 per cent last months, largely due to a multi-year low interest rate, while the Commerce Dept. had also been quoted saying last month that the construction of new homes surged 22.6 per cent last month.
Meanwhile, while the latest series of buoyant data had led to the investors’ belief that the pandemic-induced low interest rates would continue to support the US housing market over the coming months, pointing towards the flipside of the coin, an analyst of Oxford Economics, Nancy Vanden Houten wrote in a client note, “Sales may struggle to maintain their July pace going forward.
While strong demand and lower mortgage rates are supportive of further growth in sales, the slow recovery and weak labor market pose downside risks"