New Home Sales Post Surprise Jump in August

U.S. new home sales (search) jumped a surprising 9.4 percent in August, the fastest acceleration of sales in almost four years, as a fresh dip in mortgage interest rates attracted buyers, a government report showed on Monday.

Sales of new single-family homes climbed to seasonally adjusted annual rate of 1.184 million units from a downwardly revised 1.082 million units the month before, the Commerce Department (search) said. It was the sharpest climb since December 2000.

Analysts polled by Reuters were expecting sales to rise to a 1.165 million pace.

Inventories rose to 404,000 homes available sale, the largest amount since October 1979, but the supply of homes available at the current sales pace dipped to 4.2 months.

Mortgage rates crept higher in early summer on expectations of a strengthening U.S. economy, but have slid since then.

New home sales had declined in both July and June.

Sales of new homes are recorded when a buyer signs a contract whether the home is built or not, and are therefore a more forward-looking indicator of housing activity than sales of homes that are already owned, which are recorded on the closing of a sale.

New home sales surged 12.6 percent in the South, the region with the biggest volume. Sales rose 19.5 percent in the West and 6.1 percent in the Northeast, but slid 8.3 percent in the Midwest.