New Home Sales Rebound in August, After July Slump

by Christopher Freeburn | September 25, 2013 12:11 pm

New Home Sales Rebound in August, After July Slump

homeForSale New Home Sales Rebound in August, After July Slump[1]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[2].

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[3] compared to last year.

 

The news gave homebuilders some joy, sending shares of Ryland Group (RYL[4]) up more than 2% in Wednesday mid-day trading, while DR Horton (DHI[5]) shares gained almost 2%. Toll Brothers (TOL[6]) shares rose slipped slightly.

Endnotes:
  1. [Image]: http://investorplace.com/wp-content/uploads/2012/07/homeForSale.jpg
  2. a sizable boost to new home sales last month: http://www.washingtonpost.com/politics/us-new-home-sales-jump-79-percent-in-august-to-421k-biggest-one-month-gain-since-january/2013/09/25/7a4c51f0-25ec-11e3-9372-92606241ae9c_story.html
  3. in home prices in 20 major metropolitan markets: http://investorplace.com/2013/09/home-prices-see-biggest-gain-in-7-years-3/
  4. RYL: http://studio-5.financialcontent.com/investplace/quote?Symbol=RYL
  5. DHI: http://studio-5.financialcontent.com/investplace/quote?Symbol=DHI
  6. TOL: http://studio-5.financialcontent.com/investplace/quote?Symbol=TOL

Source URL: http://investorplace.com/2013/09/new-home-sales-rebound-in-august-after-july-slump/
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