U.S. home sales, a barometer of economic growth and customer confidence, are seeing a sustained uptick for the first time in seven years.
After the housing bubble burst about five years back in 2007 following the sub-prime mortgage crisis, there is a clear trend emerging with figures showing that sales of both new homes as well as re-sales were picking up.
There has been a consistent rise in prices, purchases and construction though it still has to regain the levels that they were at before the crisis.
Get Complete Analysis on The Housing Sector Here
Sales of previously occupied homes rose 2.3 percent in July from June to a seasonally adjusted annual rate of 4.47 million, the National Association of Realtors said Wednesday.
Over the past 12 months, sales have jumped more than 10 percent.
Sales of new homes have also strengthened and builders acknowledged that this was the most consistent demand that they had seen in five years.
Data from various sources show that home prices are rising nationwide slowly but steadily. They increased 2.2 percent from April to May, according to one leading index. That was the second straight increase after seven months of flat or declining prices.
The National Association of Realtors said that the median U.S. home price rose 9.4 percent in July compared with a year earlier to $187,300.
That was the biggest annual gain in six and a half years. Sales of foreclosed homes were contributed to a lower proportion of sales indicating that customers were also defaulting less on their mortgage payments.
More builders are applying for permits than before, a sure indication of the renewed demand for housing in the economy.
Can Homebuilder Stocks Continue To Move Higher? Find Out Here
Shares of Homebuilders were mostly up on Wednesday with Toll Brothers Inc(NYSE:TOL) jumped 3.77% after the company reported a 46% jump in its third-quarter earnings boosted by solid revenue growth. The stock made its highest point of $33.68, first time since 2007.
D.R. Horton, Inc.(NYSE:DHI) added 4.11% to $19.00, PulteGroup, Inc.(NYSE:PHM) gained 3.91% to $13.29 and Hovnanian Enterprises, Inc.(NYSE:HOV) surged 4%.
Lennar Corporation(NYSE:LEN) and Beazer Homes USA, Inc.(NYSE:BZH) also rose 3.75% and 2.42%.