POSTED: Thursday, September 27, 2012 - 7:00am
UPDATED: Thursday, September 27, 2012 - 7:04am
NEW YORK (CNNMoney) — Sales of new homes were little changed in August, but prices rose sharply in a signal of continued improvement in the housing market, according to a government report issued Wednesday.
New homes sold at an annual rate of 373,000, down 1,000 from the July reading from the Census Bureau, which tracks the sales. The number is 28 percent above year-earlier levels.
But the median price of a new home jumped 11 percent from the July reading to $256,900. While month-to-month readings can be volatile, the latest reading lifted the year-over-year improvement in sales price to 17 percent.
The prices are helped by a number of factors, including a tight supply in new homes available on the market. Census estimates there is now only a 4.5 month supply of new homes on the market, unchanged from July but down from 6.6 months at the same time last year.
There have been numerous signs of a turnaround in the housing market in recent months, including broad improvement in home prices, new housing construction and the sale of pre-owned homes. The pace of home foreclosures, which had been hanging over the market driving down prices, is also down from year-ago levels. And record low mortgage rates is helping to lower the cost of home ownership.
While the current pace of sales is far above the 306,000 new homes sold in 2011, it's still well below the pace of sales during the housing bubble of the last decade, when more than 1 million new homes were sold every year from 2003 through 2006. Even in the five years before that bubble, there were about 900,000 new homes sold on average every year.