WASHINGTON (MCT) — New home sales jumped 5.7 percent in September from the previous month to the highest rate in more than two years as the housing market resurgence continued to take hold, the Commerce Department said Wednesday.
New single-family homes sold last month at an annualized rate of 389,000, up 27.1 percent from a year earlier. It was the best performance since April 2010, when the rate was 422,000. That figure was boosted by a tax credit for first-time homebuyers.
The September increase beat analysts' expectations of an annualized rate of 385,000 and came as other recent data pointed to a housing rebound.
But the median sales price for new homes last month dropped about 3.2 percent, to $242,400, from August's revised figures. Still, September's median price was up 11.7 percent from a year earlier.
"All the housing data has taken a turn for the better," said Steven Ricchiuto, chief economist for Mizuho Securities.
"Clearly, mortgage rates at such a low level and what appears to be an increase in banks' willingness to make loans has boosted activity off the lows," he said. "The gains look large on a year-over-year basis, but that owes to the exceptionally low level of activity."
Some regions of the U.S. fared much better than others in September sales.
New home sales were up 16.8 percent from the previous month in the South and 16.7 percent in the Northeast. But sales were down sharply in the Midwest — 37.3 percent. Sales in the Western U.S. were up 3.9 percent from August.
Despite the overall positive data, Ricchiuto cautioned that the housing turnaround could be another "false start" unless employment picks up.