WASHINGTON - Purchases of new U.S. homes rose in September to the highest level in more than two years as the industry that helped bring on the recession forged its way toward recovery.
Sales climbed 5.7 percent to a 389,000 annual pace, the most since April 2010, following a revised 368,000 rate in August, figures from the Commerce Department showed today in Washington. The median estimate of 75 economists surveyed by Bloomberg called for sales to rise to 385,000.
Demand for new homes is being driven by record-low mortgage rates and population growth, which will help generate business for builders like Hovnanian Enterprises Inc. A lack of jobs and strict lending conditions still pose hurdles to a more pronounced rebound, one reason why Federal Reserve policy makers have pledged to keep pumping money into the economy.
“We’re starting to see more and more momentum each month in the housing market,” said Robert Kavcic, a Bank of Montreal economist in Toronto, who forecast sales would rise to 388,000. “The months supply was back to pre-recession levels, which is definitely good news for housing starts.”
Stocks were little changed after the report. The Standard & Poor’s 500 Index was at 1,413.81 at 10:15 a.m. in New York, up less than 0.1 percent from yesterday’s close. Treasury securities fell, sending the yield on the benchmark 10-year note up to 1.77 percent from 1.76 percent late yesterday.
The economists’ estimates ranged from a sales rate of 370,000 to 410,000. The August reading was previously reported as a 373,000 annual rate.
A government tax credit helped boost sales in April 2010, the last time they were this strong.
Demand for new houses was up 27.1 percent from a year ago, today’s report showed. The median price for a new house climbed 11.7 percent in September from the same month last year to $242,400.
Purchases increased in three of four regions last month, led by a 16.8 percent gain in the South, and a 16.7 percent increase in the Northeast. Sales in the Midwest dropped 37.3 percent, the biggest decrease since January 1994.
A jump in housing starts in September was the latest sign the new-home industry is showing signs of vitality. Beginning construction rose last month to an 872,000 annual rate, the fastest pace since July 2008 and exceeding all forecasts in a Bloomberg survey, Commerce Department figures showed Oct. 17.