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Surge in new home sales signals sustained US housing rebound

By Religare
|

American housing is back in the black as supportive monetary policy and upbeat consumer sentiment help spark a revival in the sector, lifting the outlook for the world's biggest economy.

Sales of new homes in the US surged to the second-highest level since the recession last month, signaling a sustained recovery in the American housing market.

US new home sales rose by 2.3 per cent to an annualized pace of 454,000 in April 2013 from 444,000 in the previous month, the Commerce Department said in a report on Thursday.

 

Analysts had expected a rise in new home sales to 430,000 last month.

Demand for new and existing homes continues to remain robust, raising hopes that an improved housing sector may help sustain growth in the US economy constrained by fiscal cuts and weak manufacturing.

An improving labour market and low mortgage rates encourage more buyers to jump into the industry.

Low mortgage rates continue to support the housing market as they boost home affordability. The Federal Reserve's USD 85 billion monthly bond buying program is aiding the housing recovery as its record easing plans exert downward pressure on interest rates.

A pickup in job growth has also made Americans more optimistic over their personal finances, boosting home buying activity.

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Story first published: Friday, May 24, 2013, 23:34 [IST]
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