A report released by the Commerce Department on Wednesday showed new home sales in the U.S. unexpectedly skyrocketed to their highest level in well over three years in the month of August.
The Commerce Department said new home sales soared by 20.5 percent to an annual rate of 800,000 in August after slumping by 1.8 percent to a revised rate of 664,000 in July.
With the unexpected spike, housing starts leapt to their highest level since hitting an annual rate of 807,000 in January 2022.
The substantial increase by new home sales partly reflected strength in the Northeast, where new home sales soared by 72.2 percent to an annual rate of 31,000.
New home sales in the South also shot up by 24.7 percent to an annual rate of 530,000, while new home sales in the Midwest surged by 12.7 percent to an annual rate of 89,000 and new home sales in the West jumped by 5.6 percent to an annual rate of 150,000.
The report also said the estimate of new houses for sale at the end of August was 490,000, down 1.4 percent from 497,000 in July but up 4.0 percent from 471,000 a year ago.
The estimate of new houses for sale represents 7.4 months of supply at the current sales rate, down from 9.0 months in July and 8.2 months in August 2024.
Meanwhile, the Commerce Department said the median sales price of new houses sold in August was $413,500, up 4.7 percent from $395,100 in July and up 1.9 percent from $405,800 a year ago.