New-home sales hit best mark since ’08

Published 3:16 pm Tuesday, June 23, 2015

WASHINGTON — Purchases of new U.S. homes surged in the Northeast and West in May, as steady job growth over the past year has lifted the real estate sector.

The Commerce Department said Tuesday that new-home sales rose 2.2 percent last month to a seasonally adjusted annual rate of 546,000, the strongest pace since February 2008.

Sales of new homes have soared 24 percent year-to-date, helped by the additional incomes from the employers hiring 3.1 million workers in the past 12 months and relatively low mortgage rates. The sharp increase in purchases could help drive more employment in the construction sector and broader economic growth, potentially offsetting the setbacks to growth in the manufacturing sector caused by cheaper oil prices and a stronger dollar that has hurt exports.

“The robust demand in the housing market continues,” said Tom Wind, executive vice president of home lending at Florida-based EverBank. “We expect factors like strong job growth, low rates, and rising rental costs to continue supporting this trend.”

Last month’s sales gains were concentrated in the Northeast, where sales jumped 87.5 percent, a likely unsustainable rise that might reflect pent-up demand following an unusually harsh winter. New-home sales increased 13.1 percent in the West, but slipped in the Midwest and South.

The median sales price has fallen slightly, dipping 1 percent over the past 12 months to $282,800.