The Commerce Department said on Wednesday new home sales soared unexpectedly 18.9% to a seasonally adjusted annual rate of 667,000 units in September an increase in all four regions.
Sales of new U.S. single-family homes unexpectedly rose in September, hitting their highest level in nearly 10 years says Reuters. The rosy data suggests the housing market was regaining speed after appearing to stall in recent months.
The level of new home sales was the highest since October 2007 and followed August's upwardly revised sales pace of 561,000 units from the previously reported 560,000 units.
A 25-year gap in highest gain
The 18.9% gain was the largest since January 1992. Economists polled by Reuters had forecast new home sales, which account for 11% of overall home sales, to fall 0.9% to a pace of 555,000 units last month.
New home sales, which are drawn from permits, are volatile on a month-to-month basis. Sales soared 17.0 percent on a year-on-year basis in September.
The pace of the housing market for much of this year has been impacted by shortages of homes available for sale, skilled labour and suitable land for building.
Housing market third-quarter economic drag
Activity was also hampered by Hurricanes Harvey and Irma, which weighed on homebuilding in September and hurt the sales of previously owned homes in the South.
Housing is expected to have been a drag on economic growth in the third quarter. More than two-thirds of the new homes sold last month were either under construction or yet to be started.
With sales surging in September, the inventory of new homes on the market was unchanged at 279,000 units. Sales in the South hit their highest level since July 2007, but there were also strong gains in the West and Midwest last month.
At September's robust sales pace it would take 5.0 months to clear the supply of houses on the market, down from 6.0 months in August. A six-month supply is viewed as a healthy balance between supply and demand.