US home sales jump to a nearly 9-year high

Borrowing costs are down, demand is up
August 23, 2016 03:45PM

Home for sale (credit: MLS)

Home for sale (credit: MLS)

From the New York website: Home sales shot up last month, nearly hitting the highest level seen in the past nine years.

Sales reached the fastest pace seen since October 2007, jumping 12.4 percent to an annualized pace of 654,000, Bloomberg reported. New data from the Commerce Department shows strong housing demand in the U.S., especially in the south, reduced inventory and a spike in entry-level homes sold. At the same time, median sales price of a new house dropped 0.5 percent from July 2015 to $294,600.

Brett Ryan, an economist at Deutsche Bank in New York, told the website that the increase can be attributed to the fact that “interest rates are low, credit continues to ease and the consumer is in decent shape given the jobs market.”

“You’re seeing finally that builders are responding with more supply, and that’s been one of the big problems in the current cycle,” Ryan said.

In April, pending home sales across the nation hit a 10-year high, due to low interest rates and job growth. The sales index for homes under contract rose to 116.3 in April, the highest level seen since February 2006. [Bloomberg] — Kathryn Brenzel