New Home Sales Improve in US

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New home sales in the U.S. increased 7.9 percent in August compared to the month before, after enduring a sharp drop in July, according to newly released data. 

Sales of newly built homes increased to a seasonally adjusted annual rate of 421,000, compared to 390,000 in July, the U.S. Census Bureau and the Department of Housing and Urban Development reported today. The August figure was 12.6 percent higher than the August 2012 estimate of 374,000. 

New home sales in July dropped as increasing mortgage rates kept buyers at bay. Mortgage rates have since decreased as concerns with a weakening economic recovery prompted the Federal Reserve to continue its bond purchasing program.

Regionally, the largest increase in new home sales were in the Midwest, where sales increased by 20 percent in August, compared to July, the government reported. Sales in the South increased 15 percent from last month. On the other hand, new home sales decreased by 15 percent in the West compared to July. 

The median new home sales price in August was $254,600, a decrease from the $257,200 in July. The seasonally adjusted estimate of new homes for sale by the end of August was 175,000, representing a five-month supply based on the current sales rate.