US new-home sales hit nearly nine-year high

Sales of new homes in the United States hit their highest pace in nearly nine year in July, helped by pent-up demand and ultra-low mortgage rates, the Commerce Department reported Tuesday.

Sales of new single-family houses registered an annual rate of 654,000 units, 12.4 percent higher than June and more than 31 percent higher than a year ago.

That was well above analyst predictions and buoyed hopes of consistent strength in the housing market, a key part of the economy.

At $294,600, the median sales price in July was roughly in line with the 2015 average, but were expected to rise.

Ian Shepherdson of Pantheon Macroeconomics noted that the monthly housing sales data is very volatile and that a recent slowdown in mortgage applications could signal somewhat weaker demand in the coming months.

However, he added, "The headline sales numbers look great, inventory is low and falling, and prices are rising by about 5 percent year on year. If sales can be maintained at anything close to the July level, homebuilding activity will need to rise sharply."