Sales of new single-family homes in the U.S. jumped 9.6% in July from the month before, the Census Bureau reported Wednesday, increasing for the fourth consecutive month and providing more hope that the housing market is firming.
The seasonally adjusted annual rate of new-home sales rose to 433,000 in July from a June rate of 395,000, census data showed, propelled by relatively low prices and a government tax credit.
Although month-to-month numbers have been marching up for the last four months, July's number is still 13.4% below the July 2008 estimated rate of 500,000 new homes sold, the Census Bureau said.
July's sales total was bigger than many analysts had expected. But the new-home market is so glutted that it would take about 7 1/2 months at the current sales rate to sell the supply of new homes, the Census Bureau said. Even that is an improvement: The last time the backlog was this low was April 2007.
At the end of July, 271,000 new houses were for sale, down more than 3% from June.
The median sales price of a new home was $210,100 in July, off only a hair from the $210,400 in June but down 11.5% from $237,300 a year earlier, the bureau said. The median is the point at which half the new homes sold were more expensive and half were cheaper. The average price was $269,200, the data showed.
Falling home prices are bringing more buyers into the market. First-time home buyers also are looking to qualify for a federal tax credit of up to $8,000.
The sales must be completed by the end of November to take advantage of the credit. If Congress doesn't extend the credit, home sales could be hurt, experts said.