Washington, DC, Sept. 25--Sales of new U.S. homes in August rose to the second highest rate on record, the government said on Thursday in a better-than-expected report that suggested a hot housing sector was still underpinning the economic recovery.
New single-family home sales gained 3.4 percent in August to a seasonally adjusted annual rate of 1.15 million from a downwardly revised 1.11 million June pace, the Commerce Department said.
Wall Street economists had expected homes sales to slow to a 1.12 million unit pace from July's previously reported 1.17 million.
While the number of homes on the market at the end of last month hit its highest level since July 1996 at 347,000, the inventory as measured against August's sizzling sales pace--second only to the 1.18 million rate hit in June--held steady at a lean 3.7 months' supply.
Sales in August picked up sharply in the Midwest and Northeast, where gains close to 13 percent were seen, and were up 2.4 percent in the West. However, sales dipped 1.1 percent in the South, the region with the largest volume of sales.
Rates on 30-year mortgages in August stood about 1 percentage point above the low of 5.21 percent reached in June, according to home financing giant Freddie Mac. Still, rates are low by historic standards and many economists look for a record level of housing activity this year.
The department said the average sales price for a home dipped to $237,500 in August from $251,800 in July.
