On Wednesday, the Commerce Department reported that new home sales have jumped 27.1% over this time last year. On a month-to-month basis, September sales of new homes increased 5.7% over August to reach an annualized rate of 389,000 units, the highest level since April 2010 when sales were boosted by a first-time homebuyer tax credit.
In addition, the median price of a new home has risen 11.7% from a year ago. Overall, U.S. home prices have jumped 4.6% compared to a year ago, the biggest increase in six years. Home prices are also up 0.3% from last month, topping six straight months of gain.
Sounds great, right? But, wait, there’s still more positive economic news:
- Consumer confidence, another key economic benchmark, is at its highest in 5 years. Thomson Reuters/University of Michigan’s October consumer sentiment index increased to 83.1, the peak level since before the Great recession started.
- Not only are sales and prices up, but Bloomberg reports that U.S. home values also increased 1.3% in Q3, the biggest gain since 2006.
- Builders are responding to the uptick in housing by breaking ground on single-family homes and apartments at the most rapid pace in four years. Home construction companies are also requesting the most building permits in four years, an indication of their confidence in housing recovery – and a sign that another unemployment drop might be around the corner. Each completed home creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to the National Association of Home Builders.