Sales of new homes in the U.S. unexpectedly advanced for a fourth month in August to the highest level in almost 14 years as record-low mortgage rates continued to entice buyers into a market with ever-shrinking supply.

Purchases of new single-family houses increased 4.8% to a 1.01 million annualized pace, led by a flurry of demand in the South, after an upwardly revised 14.7% surge in July, U.S. Department of Commerce data showed Thursday. New-home sales are now up 43.2% from this point last year.

The median selling price decreased from a year earlier to $312,800 and the number of homes for sale dropped to an almost three-year low. Economists expected an 890,000 pace, according to the median estimate in a Bloomberg survey.

“The August figure is the first reading above 1 million since 2006, so both new and existing home sales registered their best results since 2006 in August,” wrote Stephen Stanley, chief economist at Amherst Pierpont. “The level beat expectations by over 100K.”

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The rapid spread of covid-19 infections in the U.S. this spring quashed sales, but not demand. The pace picked back up in the summer, driving home prices in many places to record highs.

The data are the latest to highlight momentum in the housing market, driven by low borrowing costs and a desire for new property during a pandemic that’s led to many more Americans working from home. It’s difficult to gauge how long such robust demand will last,
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