Purchases of new U.S. homes hovered in August near a two-year high, adding to signs that the housing market is on the way to recovery.
Sales fell 0.3 percent to a 373,000 annual pace following a revised 374,000 rate in July that was higher than previously estimated and the strongest since April 2010, figures from the Commerce Department showed today in Washington. The median estimate of 71 economists surveyed by Bloomberg called for a rise to 380,000.
Record-low borrowing costs continue to attract buyers, lifting demand for homebuilders, while a drop in the supply of foreclosed homes is easing downward pressure on prices. Federal Reserve policy makers have targeted the housing market with further accommodation measures in order to spur growth and reduce unemployment.
“Builders are a little more optimistic about future sales and buyer traffic and the mortgage environment is favorable,” said Anika Khan, an economist at Wells Fargo Securities LLC in Charlotte, North Carolina. “New homes sales will continue to improve over the next few months and in the coming year.”
Stocks held earlier losses after the report. The Standard & Poor’s 500 Index fell 0.3 percent to 1,437.17 at 10:15 a.m. in New York amid concern Europe’s debt crisis is worsening. Treasury securities rose, sending the yield on the benchmark 10- year note down to 1.63 percent from 1.67 percent late yesterday.
Estimates of economists surveyed ranged from 360,000 to 400,000. July’s reading was previously reported as 372,000.
Purchases fell in only one of four regions as demand in the South dropped 4.9 percent. Sales jumped 20 percent in the Northeast, rose 1.8 percent in the Midwest and 0.9 percent in the West.
The drop in the South, where median prices are compared, pared with the surge in the Northeast, where property values tend to be higher, caused the median costs nationally to jump. The median price of all sales last month was $256,900, up 17 percent from August 2011. The 12-month advance was the biggest since December 2004. The 11 percent gain from July was the largest one-month increase in records going back to 1963.
Sales of new houses were up 28 percent from a year ago, today’s report from the Commerce Department showed
The supply of homes at the current sales rate held at 4.5 months. There were 141,000 new houses on the market at the end of August, matching July’s record low.