Sales of new homes surged to an eight-year high last year, according to the final numbers released Wednesday by the U.S. Commerce Department. Sales of new single-family homes increased 14.5 percent last year to 501,000 units, the highest level since 2007. Just in December, new-home sales rose 10.8 percent to a seasonally adjusted annual rate of 544,000, proving a strong end to 2015 for new-home construction. “The December sales report is a great end to a very strong year,” says Ed Brady, chairman of the National Association of Home Builders. “As we move forward in 2016, we should see the housing market continue to make lasting gains.” All four regions of the U.S. posted gains in new-home sales in December, led by the largest month-over-month gain in the Midwest with a 31.6 percent increase. Sales also rose 21 percent in the West; 20.8 percent in the Northeast; and 0.4 percent in the South. "Relatively low interest rates and an improving economy are motivating buyers to make a new-home purchase," says NAHB Chief Economist David Crowe. "Builders are upping their inventory in response to heightened consumer interest. Housing inventory is now at its highest level since October 2009." Inventories of new homes for sale is now at a 5.2-month supply at the current sales pace, the Commerce Department reports. New-home prices averaged $294,575 for 2015, a 4 percent increase over the previous year.

Source: NAHB