US consumer confidence steady in July

New home sales near 8-1/2-year high

WASHINGTON, July 26, (Agencies): US consumer confidence held steady in July and new single-family home sales hit their highest level in nearly 8-1/2 years in June, suggesting sustained momentum in the economy.

Other data on Tuesday showed moderate gains in house prices in May, which should support consumer spending and keep home purchasing affordable, especially for first-time buyers who have started venturing into the housing market.

The Conference Board said its consumer index was 97.3 this month after a reading of 97.4 in June. The largely unchanged data followed Britain’s stunning vote last month to leave the European Union, which rattled global financial markets and led to a dip in other sentiment measures.

A recent rally on Wall Street, strengthening US labor market and lower gasoline prices are supporting consumer confidence, helping to underpin economic activity.

Prices for long-dated US Treasuries fell after the data, while the dollar rose against the euro. US stocks were trading slightly higher.

In a separate report the Commerce Department said new home sales increased 3.5 percent to a seasonally adjusted annual rate of 592,000 units last month, the highest level since February 2008. Economists polled by Reuters had forecast new home sales, which account for about 9.6 percent of the housing market, rising to a rate of 560,000 units last month.

Sales were up 25.4 percent from a year ago. Last month’s increase left new home sales in the second quarter well above their average for the first three months of the year.

The housing market is gaining speed with a report last week showing home resales vaulted to near a 9-1/2-year high in June. At the same time, single-family housing starts increased solidly in June.

The housing market, which is being buoyed by tightening labor market conditions and mortgage rates near record lows, is helping to power the economy. New home sales are likely benefiting from a persistent shortage of previously owned houses available for sale.

New single-family homes sales jumped 10.4 percent in the Midwest and soared 10.9 percent in the West, which has seen a sharp increase in home prices amid tight inventories. But sales fell 5.6 percent in the Northeast and slipped 0.3 percent in the populous South.

Last month, the inventory of new homes on the market increased 1.2 percent to 244,000 units. At June’s sales pace it would take 4.9 months to clear the supply of houses on the market, down from 5.1 months in May.

A third report on Tuesday showed the S&P CoreLogic Case-Shiller composite index of 20 metropolitan areas rose 5.2 percent in May on a year-over-year basis. Prices rose 5.4 percent in April.

Prices in the 20 cities fell 0.1 percent in May from April on a seasonally adjusted basis. They increased 0.9 percent from April on an unadjusted basis.

Meanwhile, US home prices extended their steady upward march in May, spurred by rising sales and a dwindling supply of available houses.

The Standard & Poor’s CoreLogic Case-Shiller 20-city home price index increased 5.2 percent in May compared

with a year ago. That is down from a 5.4 percent annual gain in April but still above last summer’s growth rate.

Solid job growth and near-record low mortgage rates are spurring more Americans to buy homes. Yet higher prices haven’t encouraged more people to list their properties for sale. That is forcing buyers to compete against each other and bid up prices, particularly in coastal cities with strong job growth.

“Sellers are in the driver’s seat, as buyers contend with fierce competition and very fast-moving markets,” Svenja Gudell, chief economist at real estate data provider Zillow, said.

Home prices are slowly edging back to their peak levels reached during the housing bubble a decade ago. After falling 35 percent from 2006 through 2012, the 20-city index is now just 8.8 percent below its peak.

Portland, Oregon, Seattle, and Denver posted the biggest year-over-year gains in

May for the fourth straight month. Home prices increased 12.5 percent in Portland, 10.7 percent in Seattle and 9.5 percent in Denver.

While the 20 city-index remains below its bubble level, seven cities reached new peaks in April, including Portland, Seattle and Denver as well as Boston, Charlotte, Dallas and San Francisco.

Ralph McLaughlin, chief economist at online real estate service Trulia, points out that home price gains in San Francisco, one of the nation’s most expensive housing markets, finally appear to be slowing. They rose 6.5 percent from a year earlier, the smallest annual gain in nearly four years.

The housing market has been mostly healthy this year, adding to its steady recovery from the bust that began in 2006. Sales of existing homes rose 1.1 percent in June to the highest level in more than nine years.