Optimism about the housing market is reaching near-unanimous levels. Sales of new homes in July rose 9.6%  from the month before, the biggest jump since the height of the housing boom in 2005. According to Bloomberg, inventories of new homes also fell to the lowest level in 16 years.

Purchase activity was the strongest in the Northeast, where sales leapt 32%. Meanwhile, out West, sales increased just 1%. This is an interesting trend to note, as thus far in the market’s correction the West has been a leading indicator for the rest of the country. That sales appear to be stagnating out West should be concerning for those hoping for a legitimate recovery.

The ultimate question is whether this bounce, which has been spurred largely by government intervention in the form of tax-incentives, low interest rates and support for the capital markets can be sustained through the traditionally slow fall and winter months. Time, it appears will be the true arbiter of the nascent housing recovery.

Tags: new home sales

This entry was posted on Wednesday, August 26th, 2009 at 10:14 am and is filed under Mortgages. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.