New home sales match two-year high

New home sales in July climb 3.6 percent, matching May's total of new home sales. The supply of new homes for sale falls to a 49-year low.

By , Los Angeles Times (MCT)

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    In this Tuesday photo, a new home is under construction in Palo Alto, Calif. New home sales in the United States rose 3.6 percent in July to match a two-year high reached in May, the latest sign of a steady recovery in the housing market.
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In another sign of improvement in the housing market, new home sales increased 3.6 percent in July from the previous month, the government reported Thursday.

Sales of new residential homes rose to a seasonally adjusted level of 372,000 units in July, matching a more than two-year high for total sales, the Census Bureau said.

The same number of new homes were sold in May before sales dipped to 359,000 in June. The last time more new homes were sold in the U.S. was in April 2010, when there were 422,000 sold, according to government data.

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Economists had expected a smaller increase in July, to about 365,000 sales. But a sharp rise in the Northeast offset slight declines in the South and West to boost the numbers.

July sales were up 25.3 percent nationwide from a year earlier. And although sales aren’t close to the levels normally associated with an economic recovery, the trend is improving.

“Levels of housing activity remain extremely depressed relative to previous peaks, but growth rates across most of the housing data are clearly moving in the right direction,” Jill Brown, vice president of economics for Credit Suisse, said in a note.

On Wednesday, the National Association of Realtors reported that sales of previously occupied homes were up 2.3 percent in July after also dipping in June.

But new home construction has yet to pick up. The number of new houses for sale at the end of July fell slightly to 142,000 — a 4.6-month supply — compared to 143,000 at the end of June.

The July figure marked the lowest level of new houses for sale since the Census Bureau began tracking the data in 1963.

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