AP NEWSWIRE:  Mon., July 27, 2009

New-home sales soar 11% in June

 

WASHINGTON - New home sales jumped in June by the largest amount in more than eight years as buyers took advantage of bargain prices, low interest rates and a federal tax credit for first-time homeowners.

While home prices are still falling, the figures released Monday were another sign the housing market is finally bouncing back. Data out last week showed home resales rose 3.6% in June, the third straight monthly increase.

Buyers are rushing to tax advantage of a federal tax credit that covers 10% of the home price or up to $8,000 for first-time buyers. Home sales need to be completed by the end of November for buyers to take advantage.

"The window of opportunity is closing," said Bernard Markstein, senior economist for the National Association of Home Builders.

Sales have risen for three straight months. The median sales price of $206,200, however, was down 12% from $234,300 a year earlier and down nearly 6% from $219,000 in May.  There were 281,000 new homes for sale at the end of June, down more than 4% from May. At the current sales pace, that represents 8.8 months of supply — the lowest level since October 2007. If that number falls to just over 6 months, analysts say, builders will feel more comfortable ramping up construction.