"It [new home sales] is another sign of life in the housing sector"
- Brian Jones, a senior U.S. economist for Societe Generale SA
Sales of new U.S. homes rose by more than expected in May as mortgage rates dropped. Purchases climbed to 369,000 in May, the highest level in more than two years and up by 7.6 per cent from the previous month, said the Commerce Department on Monday.
"It's another sign of life in the housing sector," said Brian Jones, a senior U.S. economist for Societe Generale SA in New York. "It's consistent with a gradual improvement in activity, but we've got miles to go before we get back to normal."
"The level of new home sales in May was still quite depressed but the combination of more affordable prices and ultra-low mortgage rates appears to be supporting a decent rise off the bottom for housing demand," said Michael Feroli, an economist at JPMorgan in New York.
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