Sales of new homes rise 13.9% in July, far more than thought

SILVER SPRING, Md. (AP) — Sales of new homes jumped again in July, rising 13.9% as the housing market continues to gain traction following a spring downturn caused by pandemic-related lockdowns.

The Commerce Department reported Tuesday that July's gain propelled sales of new homes to a seasonally-adjusted annual rate of 901,000. That's a far bigger number than analysts had expected and follows big increases in May and June.

The recent sales gains followed a steep dropoff in March and April as much of the country stayed home due to government restrictions intended to slow the spread of coronavirus .

The median price of a new home sold in June increased to $330,600.

In a report last week, the National Association of Realtors reported that sales of existing homes rose by a record 24.7% in July, thanks to historically low interest rates. It was the second big spike in as many months and has helped stabilize the housing market in an otherwise uncertain economic time.

Also last week, the Commerce Department reported that construction of new U.S. homes surged 22.6% in July as homebuilders bounced back from a lull induced by the coronavirus pandemic.