WASHINGTON – Americans bought new homes last month at the fastest pace in more than two and a half years, further evidence of a sustained housing recovery.
Sales of new homes rose 4.4 per cent in November from October to a seasonally adjusted annual rate of 377,000, the Commerce Department said Thursday. That’s the fastest pace since April 2010, when a federal tax credit boosted sales.
New-home sales have also increased 15.3 per cent over the past year, although the improvement comes from depressed levels. Sales remain below the 700,000 that economists consider healthy.
Sales in the Northeast rebounded in November from disruptions caused by Superstorm Sandy. Sales in the region increased 12.5 per cent last month. That followed a decline of 27.3 per cent in October.
The housing market has steadily improved this year, helped by stable job gains and record-low mortgage rates. More people are looking to buy or rent a home after living with relatives or friends during and immediately after the Great Recession.
Another big reason for the rebound: The excess supply of homes that were built during the housing boom has finally thinned out. Only 149,000 new homes were for sale at the end of last month, according to the report. That’s just above a record low of 143,000 in August.
The increase in the supply of new homes for sale was the first sustained rise in five years. Economists said that reflects growing optimism among builders that the housing recovery will endure.
Builder confidence rose this month to its highest level in 6 1/2 years, according to the National Association of Home Builders/Wells Fargo survey released last week.
The pace of home construction is nearly 22 per cent higher than a year earlier, according to government data. Builders are on track this year to start work on the most homes in four years.
There have been other signs of a recovery in the housing market.
Home prices are also increasing. The Standard & Poor’s/Case-Shiller national home price index released Wednesday increased 4.3 per cent in October compared with a year ago. That’s the largest year-over-year increase in two and a half years. And prices rose for the 12-month period in 18 of the 20 cities tracked by the index.
Sales of previously occupied homes rose to the highest level in three years in November, the National Association of Realtors said last week.
Though new homes represent only a small portion of the housing market, they have a disproportionate impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to statistics from the National Association of Home Builders.
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