US new home sales up 18 pct in August to annual rate of 504k; West and Northeast drive buying

Economic Indicators Associated Press

U.S. sales of new homes surged in August, led by a wave of buying in the West and Northeast.

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The Commerce Department says new home sales climbed 18 percent last month to a seasonally adjusted annual rate of 504,000. The report also revised up the July sales rate to 427,000 from 412,000.

Newly constructed homes sold at the fastest clip since May 2008. It's a sign that the real estate market might improve after the recovery from the Great Recession stalled during the past year because of sluggish wage growth and rising prices.

In the West, August purchases of new homes soared 50 percent compared to the prior month.

Sales grew 29.2 percent in the Northeast. Buying increased 7.8 percent in the South and remained flat in the Midwest.