The Census Bureau reported Wednesday that new home sales rose 8% in August after plunging 14% in July.
The sudden drop in July sales sparked fears that rising mortgage rates would stall the recovery. However, economists at Wells Fargo Securities blamed extremely rainy weather in the South for the drop in sales.
“The South accounts for over half of all new home sales and new construction activity,” according to an Aug. 30 WFS report. And the National Climatic Data Center reported that “many metro areas within the South had their wettest July on record.”
Sales of newly constructed homes in the South jumped to a 241,000 seasonally adjusted annual rate in August from a 209,000 rate in July and nearly equaled the 245,000 rate in June.
Sales in the West fell to an 82,000 rate in August, down 15% from July. Otherwise, sales were up 9% in the Northeast and 20% in the Midwest.
Overall, the Census Bureau reported that new homes sales rose to a 421,000 rate in August from a 390,000 rate in July. The July sales rate is up 12.6% from a year ago.
Lennar Corp. chief executive Stuart Miller noted the housing recovery is “fundamentally based” and driven by a long-term demographic need for single-family and multifamily housing. “We believe we are in the beginning stages of a recovery that will be sustained for several more years,” the homebuilder said Tuesday in reporting Lennar’s third-quarter earnings.