WASHINGTON -- Americans stepped up their purchases of new homes in July to the fastest pace in nearly nine years, the latest sign that low mortgage rates and a solid job market are helping support the residential real estate market.
New-home sales jumped 12.4 percent last month to a seasonally adjusted rate of 654,000 annual units, the strongest level since October 2007, the Commerce Department said Tuesday.
Construction of single-family houses has picked up this year as the market has extended its recovery from the drop-off caused by the housing meltdown that began nearly a decade ago.
As the job market has strengthened and mortgage rates have settled near all-time lows, more buyers have been drawn to new developments and properties.
"We see tremendous growth potential in new-home sales as housing demand continues to grow and the continued supply shortage of newer vintage homes," said Tian Liu, chief economist at Genworth Mortgage Insurance.
The improved sales of both new and existing homes has supported the broader U.S. economy, which is still hampered by a global slowdown and weak worker productivity.