New-home sales in U.S. increased more than forecast in May

Shares Rise

Stocks climbed after the reports and as the People’s Bank of China said it will keep money-market rates at reasonable levels. The Standard & Poor’s 500 Index rose 0.5% to 1,580.42 at 10:16 a.m. in New York.

The median selling price of a new house increased to $263,900 in May from $239,200 a year earlier, according to today’s report from the Commerce Department.

Purchases rose in three of four U.S. regions, led by a 40.7% surge in the Midwest and a 20.7% gain in the Northeast. Sales in the Midwest reached an 83,000 annualized rate, the most since November 2007.

The supply of homes at the current sales rate was 4.1 months compared with 4 months in April. There were 161,000 new houses on the market at the end of May, up from 157,000 a month earlier.

Sales of new properties, which are tallied when purchase contracts are signed, are considered a more timely measure of the market than sales of previously owned dwellings, which are counted when a sale is final. New-home sales accounted for about 7% of the residential market in 2012.

Existing Houses

Purchases of previously owned homes climbed in May to the highest level in more than three years, rising 4.2% to an annual rate of 5.18 million, the National Association of Realtors reported last week. The median price of existing properties rose 15.4% from a year earlier to $208,000, the highest since July 2008, the data show.

An improving job outlook is also creating confidence. Employers in the U.S. added 175,000 jobs in May, more than the median forecast in a Bloomberg survey, and the jobless rate rose to 7.6% from 7.5% as the number of people entering the workforce swamped the number of jobs available.

Improvements in the employment situation and the housing market could boost business at companies like homebuilder and land developer AV Homes Inc., Chief Executive Officer Roger Cregg said, even as housing starts remain below long-run historical averages.

<< Page 2 of 3 >>

Copyright 2014 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

comments powered by Disqus
Check out Futures Magazine - Polls on LockerDome on LockerDome