Sales of new U.S. homes surge in May to highest since 2008

BY SHOBHANA CHANDRA AND LORRAINE WOELLERT June 24 at 8:16 PM

Purchases of new homes in the United States in May showed the highest increase in 22 years, indicating the industry is rebounding from a winter-induced lull at the start of the year.

Sales surged 18.6 percent, the biggest one-month gain since January 1992, to a 504,000 annualized pace, figures from the Commerce Department showed Tuesday. The reading was the strongest since May 2008.

The report, following data Monday showing a pickup in existing-home sales, indicates that housing is gathering momentum as employment improves and borrowing costs stabilize.

“Housing is beginning to revive,” said Stephanie Karol, an economist at IHS Global Insight. “It’s a step in the right direction. The job market is helping, and there was an expansion of supply the past couple of months.”

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