U.S. New-Home Sales Surge 8.3%; Median Price Climbs 7.4%, to $249,700, as Supply Falls to Lowest Level Since January
WASHINGTON--Sales of new homes surged in June despite higher mortgage rates, maintaining momentum for a key sector driving the economic recovery.</br></br>New-home sales increased 8.3% last month to a seasonally adjusted rate of 497,000, the Commerce Department said Wednesday. That was the highest level since May 2008. Sales were up 38% from a year earlier.</br></br>The sales jump comes amid a sharp escalation in mortgage rates, which began rising in late May. The average for a 30-year fixed-rate loan is now up about one percentage point from its recent low to 4.58%, according to Mortgage Bankers Association data also released Wednesday. That's down from 4.68% a week earlier.</br></br>"The increase in mortgage rates over the past two months does not appear to have dented new-home sales, at least not yet," said Stuart Hoffman, chief economist at PNC Financial Services Group. He cited pent-up demand, a better labor market and stronger consumer confidence as factors behind the sales boost.</br></br>Mortgage rates can hit new-home sales more quickly than sales of previously owned homes because the new-home figures are measured when a buyer signs a contract to purchase a new home. Existing-home sales figures reflect closings 30 to 60 days later, on average, after a contract is signed.