Major Growth in New Home Sales in May

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In May 12014, the sales of new homes in the US marked their highest increase since 2008. There was considerable improvement in virtually all parts of the country with some showing very high gains. Analysts agree that this surge is due primarily to the economic growth and the rise of the employment rate.

The new home sales rose by 18.6% from April to May 2014 on an annually adjusted basis to reach 504,000 units. This is the greatest jump on a monthly basis in six years. The increase on an annual basis from May 2013 to May 2014 was considerable as well. Over one year, the sales rose by 16.9%.

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The sales of new homes increased in all regions of the country. The largest gain was in the Northeast where sales in May were 54.5% higher than in April. The West also marked a major growth with 34% more sales in May compared to April. In the South, the increase was 14.2% while in the Midwest it was 1.4%.

The new home sales are still below the levels reached before the housing market crisis of 2007. Currently, they are 64% lower than the peak reached in 2005. Analysts explain this with the fact that at present we are far from a bubble which formed in the years before the crisis. Now the sales and prices are driven by economic forces rather than speculation.

The economic growth has a positive impact on job creation. The increase in employment leads to an increase in the income of consumers and in their ability to afford a house. The low mortgage rates, which have calmed down after the major jump which occurred last summer, have a positive effect on sales as well. The fact that we are in the heat of the traditionally strong spring house buying season is playing a role as well.

The growth in new home sales is expected to remain.

Christian

Christian

Christian Calvin mortgage Christian is a contributing writer for Mortgage.info. He is a graduate from the University of Tennessee with a degree in Communications and a concentration in Broadcasting. Christian has served as vice-president for a privately-held company for more than 20 years. Additionally, he has also applied his writing and business knowledge to various websites with a focus on business and sports news . . . both of which are passions. Christian enjoys playing golf and spending time with his family and friends.

Contact: christian@mortgage.info
Christian

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