Data released by HUD and the U.S. Census Bureau shows sales of new single-family homes have climbed 8.3% to a seasonally adjusted, annual rate of 497,000 units in June, the quickest pace in the last five years.
“New-home buyers are returning to the market in larger numbers as firming prices, shrinking inventories of homes for sale and improving local economies convince them that now is the time to make their move,” said Rick Judson, chairman of the National Association of Home Builders (NAHB) and a home builder from Charlotte, NC. “Meanwhile, the very low supply of new homes on the market is indicative of the difficulty that builders are having in keeping up with demand due to availability issues with regard to materials, credit, labor and lots for development.”
Three out of four regions saw gains in new-home sales activity in June. The Northeast, South and West posted increases of 18.5%, 10.9% and 13.8%, respectively. The Midwest posted an 11.8% decline following an above-trend bump in activity in May.
NAHB Chief Economist David Crowe anticipates further, though more incremental, gains in sales through the end of this year. "The takeaway from this report is that the housing recovery is solidly on track and isn't going to be derailed by slightly higher mortgage rates,” he said. “After years of fence-sitting, buyers are back and are ready to move forward with an investment in homeownership.”