Sales of new U.S. single-family homes increased in May to a more than seven-year high, brightening the outlook for the housing market and industries that look to see housing sales — such as boating.
The Commerce Department said Tuesday that sales rose 2.2 percent, to a seasonally adjusted annual rate of 546,000 units, the highest level since February of 2008. April’s sales pace was revised up to 534,000 units from a previously reported 517,000.
Economists polled by Reuters had forecast that new-home sales, which account for 9.3 percent of the market, would rise to a 525,000-unit pace last month.
The report came on the heels of a report Monday that showed home resales surged to a 5-1/2-year high in May. Data last week showed that building permits were near an eight-year peak in May; homebuilders were the most optimistic in nine months in June.
The new-home sales report added to strong retail sales, consumer sentiment and employment data in suggesting that the economy was gaining speed in the second quarter after output slumped at the start of the year.
Housing is being buoyed by a strengthening job market and steps by the government to ease lending conditions for first-time buyers through Fannie Mae and Freddie Mac, the mortgage finance companies it controls. Young adults who are setting up their own households also are lending support.
New-home sales surged 87.5 percent in the Northeast, the largest increase since July 2012. Sales increased 13.1 percent in the West, the biggest gain in nine months. Sales fell 4.3 percent in the South and were down 5.7 percent in the Midwest.
The stock of new houses for sale was unchanged, at 206,000, last month. Supply remains less than half of what it was at the height of the housing boom, which is good news for homebuilders who will need to ramp up construction.
At May’s sales pace it would take 4.5 months to clear the supply of houses on the market, down from 4.6 months in April.