(Bloomberg) -- Sales of new U.S. homes rose in July for the first time in four months, helped in part by additional inventory and indicating still-firm underlying demand.
Purchases of new single-family homes increased 1% to a 708,000 annualized pace following an upwardly revised 701,000 in June, government data showed Tuesday. The median estimate in a Bloomberg survey of economists called for a 697,000 rate.
The report suggests purchases are steadying somewhat after falling to the lowest level since April 2020 in the prior month. While inventory remains limited, an increase in the supply of homes helped fuel sales.
Compounded by low borrowing rates that led to a surge in purchases last year, builders have struggled to keep pace with demand. The resulting price surge has made homes less affordable to many Americans.
The report, produced by the U.S. Census Bureau and the Department of Housing and Urban Development, also showed the median sales price of a new home jumped 18.4% from a year earlier, to a record $390,500.
Looking ahead, any easing of builders’ trials to acquire materials and workers should support the construction of a greater number of affordable homes, generating more sales.
There were 367,000 new homes for sale in July, but almost 29% of those houses were not yet started. Some 226,000 homes were under construction, the most since 2008. The number of completed homes made up less than 10% of for-sale properties.
At the current sales pace, it would take 6.2 months to exhaust the supply of new homes compared with 6 months in June.
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