New home sales in the US climbed strongly in August, indicating that the housing market is strengthening and that consumers are in a confident mood.
Sales rose at an annual rate of 552,000, up 5.7 per cent on July, according to figures released by the commerce department yesterday. The annual rate is now the highest since February 2008.
“Although it is doubtful that the current breakneck pace will be maintained, the conditions are in place for new home sales to see further gains this year,” said Matthew Pointon, a property economist at Capital Economics.
“After seven years of very subdued activity, there is a lot of pent-up demand for homes waiting to be released.
“And with jobs still being created at a decent pace, and mortgage credit conditions loosening, more households will have the opportunity to buy a home.”
Sales of new homes declined sharply in the wake of the US mortgage crisis in 2007. They peaked at an annual rate of 1,400,000 in 2005 and bottomed out at around 300,000 in 2011, but have been growing steadily since then.