New residential home sales reach two-year high

September 27th, 2012

New home sales in August fell from the previous month, but were much higher than during the same period in 2011.

Sales of single-family homes during the month of August rose to their highest level since 2010, according to government data.

The U.S. Census Bureau and Department of Housing and Urban Development announced new home sales were at a seasonally-adjusted rate of 373,000 last month, a 0.3 percent decline from July's revised rate of 374,000. While home sales declined from the previous month, the rate represents a 27.7 percent increase from August 2011 sales.

Some economists said that as the market shows subtle signs of improvement, home sales are expected to continue their ascent in the future.

"Builders are a little more optimistic about future sales and buyer traffic and the mortgage environment is favorable," Anika Khan, an economist at Wells Fargo, told Bloomberg. "New homes sales will continue to improve over the next few months and in the coming year."

Strong home sales may be due in large part to a rise in affordability. According to the results, the median sales price of new homes in August was $256,900. Buyers should work closely with a mortgage consultant to seek out homes that fall within their price range and do not impose monthly mortgage payments that exceed 28 percent of their take-home pay.