WASHINGTON – Sales of new homes rose more than projected in July to match a two-year high, a sign the industry that helped trigger the recession is recovering.
Sales climbed 3.6 percent to a 372,000 annual pace, following a 359,000 rate in June that was higher than previously estimated, figures from the Commerce Department showed Thursday.
Last months rate was the same as in May, which was the strongest since April 2010. The median forecast of 72 economists surveyed by Bloomberg called for a rise to 365,000.
Buyers are returning to the market to take advantage of cheaper properties and record-low mortgage rates, helping to boost orders at builders such as Toll Brothers.
Competition from foreclosures, unemployment exceeding 8 percent and limited credit pose hurdles to a more pronounced rebound, one reason Federal Reserve policymakers are monitoring housing data.
The new-home market is clearly signaling a steady and fairly strong recovery, said Michael Englund, chief economist at Action Economics in Boulder, Colo. Demand should continue to climb right on into 2013.
Estimates of economists surveyed ranged from 340,000 to 400,000. Junes reading was previously reported as 350,000.
Sales of new houses were up 25 percent from a year ago, Thursdays report from the Commerce Department showed. The median price for a new house decreased 2.5 percent in July from the same month last year, to $224,200.
Purchases rose in two of four regions last month, led by a 77 percent surge in the Northeast, making up for a 55 percent plunge in June, the Commerce Department report showed.
New-home sales climbed 7.7 percent in the Midwest, and fell 1.6 percent in the South and 0.9 percent in the West.