New, Existing Home Sales Rise in July

The number of Americans purchasing newly constructed homes in July rose 6.7%, to a record 1.017 million annual rate, the Commerce Department said Monday. Sales of existing homes also surged 4.5% to a rate of 5.33 million, the National Association of Realtors reported.

Strong home sales can be a boon to the trucking industry since trucks are needed to carry goods to new homes and construction materials are hauled to construction sites where new houses are being built.

Analysts were expecting new home sales to fall around 3%, the Associated Press reported. However, July sales of existing homes fell short of the expectations of analysts, who had forecast a 5.37-million annual pace.

bservers noted the rise in sales was due to a three decade-low in mortgage rates, Bloomberg said. The average 30-year mortgage rate fell to 6.22% in the week ended Aug. 16, lender Freddie Mac said, the lowest point since the firm began keeping records in 1971.

Home builders expect the pace to cool a bit by the end of the year, the National Association of Home Builders said, with actual sales of new homes being in the neighborhood of 936,000 – eclipsing last year’s record of 908,000.

The increase in home sales is expected to generate some residual spending on furniture and appliances, Bloomberg said. Increased spending will help generate orders and boost the economy.

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