US new home sales stage small rebound

Washington: Sales of new US homes rose in August after two months of declines but the overall trend remained weak as house prices rose, the government reported Wednesday.

The housing sector is a rare dark spot in the US economy, which is otherwise in vigorous health, economists say.

A shortage of homes available for sale, sluggish building amid scare labor, and rising mortgage rates have combined to make homeownership out of reach of many Americans.

Sales of new single-family homes rose 3.5 percent over July to an annual rate of 629,000, the fastest pace since May, according to the Commerce Department report.

The result was in line with economists’ expectations and put the sales pace a solid 12.7 percent above August of last year.

Sales for June and July, however, were revised downward.

Meanwhile, the median price crept up 1.9 percent to $320,000. The supply of houses for sale also posted its sixth straight monthly gain, rising to 318,000 units.

But this represented a supply of 6.1 months at the current rate, down 1.6 percent from July, reversing some recent gains.

Official housing data are subject to broad margins of error and officials caution that trends emerge after only six months.

Some economists say the housing sector may have peaked for the current recovery and is unlikely to contribute to GDP growth any time soon.

Still, RDQ Economics said consumer confidence figures released this week showed plans to buy a new home within the next six months and homebuilder optimism remained high, “which suggest to us that the new home sales market is unlikely to see a retrenchment in the coming months.”