Recent data show sales of new single-family houses rose 9.6 percent in July.
The Commerce Department's Bureau of the Census said the economy posted a far stronger gain than the expected rise of 1.6 percent in the report released Aug. 26. Sales have risen 31.6 percent above their low in January.
"These new numbers are another sign that we have put the brakes on the worst economic downturn in generations," undersecretary for economic affairs Rebecca Blank said in a news release.
Sales of new one-family houses in July were at a seasonally adjusted annual rate of 433,000, from an upwardly revised June rate of 395,000. The median sales price of new houses sold in July 2009 was $210,100; the average sales price was $269,200. The seasonally adjusted estimate of new houses for sale at the end of July was 271,000. This represents a supply of 7.5 months at the current sales rate.
For the first time in five years, existing-home sales have increased for four months in a row, according to the National Association of Realtors (NAR).
Existing-home sales, including single-family, town homes, condominiums and co-ops, rose 7.2 percent to a seasonally adjusted annual rate of 5.24 million units in July from a level of 4.89 million in June, and are 5 percent above the 4.99 million-unit pace in July 2008. The last time sales rose for four consecutive months was in June 2004 and the last time sales were higher than a year earlier was November 2005.
"The housing market has decisively turned for the better," said Lawrence Yun, NAR chief economist in an Aug. 21 news release. "A combination of first-time buyers taking advantage of the housing stimulus tax credit and greatly improved affordability conditions is contributing to higher sales."
The monthly sales gain was the largest on record for the total existing-home sales series dating back to 1999. An NAR practitioner survey showed first-time buyers purchased 30 percent of homes in July and that distressed homes accounted for 31 percent of transactions.
Total housing inventory at the end of July rose 7.3 percent to 4.09 million existing homes available for sale, which represents a 9.4-month supply at the current sales pace, which was unchanged from June because of the strong sales gain. Raw inventory totals are 10.6 percent lower than a year ago when the number of unsold homes was at a record.
This article originally appeared in the October 2009 issue.