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U.S. New-Home Sales Reached 14-Year High in July

New-home sales jumped 13.9% in July from June to an annualized rate of 901,000, according to government data. That rate is a 14-year high.
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U.S. new-home sales reached a 14-year high in July as low mortgage rates and a suburban construction boom helped fuel 13.9% month-to-month growth.

In July the annualized rate of 901,000 was up from a revised 791,000 estimate. The latest figure is the highest since July 2006.

The median forecast of economists polled by Bloomberg was a sales rate of 790,000.

The median selling price rose 7.2% year over year to $330,000. 

Record low borrowing costs have helped fuel the housing boom, as has an exodus from major cities as companies turn to remote working in order to socially distance their employees. 

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Home purchases jumped 58.8% in the Midwest, 13% in the South and 7.8% in the West. Meanwhile, home sales fell 23.1% in the Northeast. 

The surge in homebuilding before the pandemic is also driving the growth in new-home sales, according to a report from real estate brokerage Redfin. 

The supply of new-construction homes for sale fell 28.4% in July as sales of newly built homes rose 10.1% in the month, according to Redfin. 

The firm says that the number of newly built homes on the market could grow. Residential construction projects in the U.S. rose 23.4% year over year in July while building permits jumped 9.4% to a seasonally adjusted annual rate of 1.495 million, surpassing pre-pandemic levels. 

U.S. homebuilder stocks were largely lower in the face of the reports.

At last check Lennar  (LEN) - Get Lennar Corporation Class A Report dropped 1.5%, PulteGroup  (PHM) - Get PulteGroup, Inc. Report fell 1.4%, D.R. Horton  (DHI) - Get D.R. Horton, Inc. Report gave up 1.5%, KB Home  (KBH) - Get KB Home Report declined 2.2%, and Toll Brothers  (TOL) - Get Toll Brothers, Inc. Report was off 1.6%. NVR  (NVR) - Get NVR, Inc. Report gave back 2.3%.