Tuesday, June 26, 2012

New Homes Looking Strong

Some promising signs for the housing market yesterday, as the Commerce Department released figures showing that new home sales in May grew at an annual pace of 369,000, the most that figure has jumped in over two years. That's a 7.6 percent rise from the April number.

With the number of new homes on the market still near record lows at 145,000, builders are breaking ground for new homes at a growing pace. (The record for new homes on the market was set just before the housing bubble burst, in July 2006, when it reached 572,000.) The number of new houses started increased by 3.2 percent in May, at an annual rate of 516,000.

New construction has been making up a dwindling part of the housing market in recent years; new homes were 6.7 percent of the residential market last year, down from 15 percent at the height of the housing bubble. As sales of foreclosed homes continue to recede, we'll see new homes take up a bigger slice of the housing market - which can only be good for the economy as a whole.

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