New home sales are on the rise! Americans bought new homes last month at the fastest pace in more than two and a half years. This is further evidence of a sustained housing recovery.
The Commerce Department said sales of new homes rose 4.4 percent in November from October to a seasonally adjusted annual rate of 377,000. Thatâ€™s the fastest since April 2010, when a federal tax credit boosted sales.
Over the past year, new home sales have increased 15.3 percent. The improvement comes from depressed levels. Sales remain below the 700,000 that economists consider healthy.
With steady job gains this year and ultra-low mortgage rates, sales have boosted of both new and previous occupied homes. More people are looking to buy or rent a home after living with relatives or friends during and immediately after the Great Recession.
Another big reason for the rebound is the excess supply of homes that were built during the housing boom has finally thinned out. Only 149,000 new homes were for sale at the end of last month, according to the report. Thatâ€™s just above a record low of 143,000 in August.
The market is still steadily improving which has lifted builder confidence to its highest level in 6 Â½ years, according to the National Association of Home Builders/Wells Fargo survey released last week.
Home prices are also increasing. The Standard & Poorâ€™s/Case-Shiller national home price index released Wednesday increased 4.3 percent in October compared with a year ago. Thatâ€™s the largest year-over-year increase in two and a half years!
Sales of previously occupied homes rose to the highest level in three years in November, the National Association of Realtors said last week.
Though new homes represent only a small portion of the housing market, they have a disproportionate impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to statistics from the National Association of Home Builders.
Source: The Associated Press