Industry Update: Housing Market Reaches New HeightsPosted 08/04/2016
The housing market reached new heights in June, with sales for new single-family homes rising to their highest level in more than eight-and-a-half years, according to Reuters. While experts agreed that an upswing was in the forecast, few expected such a strong performance.
According to the U.S. Department of Commerce (USDC), new home sales rose 3.5 percent to a seasonally adjusted annual rate of 592,00 units – 32,000 higher than the 560,000 predicted by economists in a recent Reuters poll.
As a result of June’s increase, new home sales were up 25.4 percent year over year, leaving the second quarter well above the average for the first three months of the year.
So, what’s fueling the housing market’s momentum? Experts say the tightening of labor market conditions and near-record-low mortgage rates are playing a role overall, with new home sales likely profiting from a consistent shortage of available, previously owned homes.
Housing starts also rose in June, up 4.8 percent from the month before to a seasonally adjusted annualized rate of 1.189 million, the USDC said. That jump surpassed the modest .9 percent forecast from economists surveyed by The Wall Street Journal.
“Homebuilding continues to gradually recover from the housing bust that accompanied the Great Recession,” PNC Bank Chief Economist Stuart Hoffman told the Wall Street Journal. “Demand for new single-family homes is slowly but steadily improving.”
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