In a sign that increasing mortgage interest rates haven’t yet cooled the U.S. housing market, the Commerce Department announced on Wednesday a sizable boost to new home sales last month.
New home sales bounced back from a 14.1% tumble in July to surge 7.9% in August. Sales last month hit a seasonally-adjusted annualized pace of 421,000 units, up from an annualized rate of 390,000 in July, the Associated Press noted.
In a year-over-year comparison, new home sales last month climbed 12.6% over the same time in 2012.
However, the median home price slipped 0.7% to $254,600 in August, compared to the prior month. The inventory of new homes on the market edged up 3.6% last month, hitting 175,000.
While the housing market continues to recover, economists consider an annualized sales pace of 700,000 units to be historically healthy.
Yesterday, the S&P/Case-Shiller index showed a 12.4% rise in home prices in 20 major metropolitan markets compared to last year.
The news gave homebuilders some joy, sending shares of Ryland Group (RYL) up more than 2% in Wednesday mid-day trading, while DR Horton (DHI) shares gained almost 2%. Toll Brothers (TOL) shares rose slipped slightly.