WASHINGTON, DC — Indicating that the housing market continues to provide strength to the U.S. economy, sales of new single-family homes increased 8.1% to a record high seasonally adjusted annual rate of 1.03 million units in May, the U.S. Department of Commerce reported. Upward revisions were also made to home sales numbers for each of the last four months.

“Low interest rates and the solid investment potential of homes are encouraging more buyers than ever to go forward with a new home purchase,” said Gary Garczynski, president of the National Association of Home Builders (NAHB).

“These buying decisions are generating thousands of dollars in related purchases that in turn will help fuel local economies.” He noted that in the first 12 months after purchasing a newly built home, owners spend an average of $8,900 to furnish, decorate, and improve their house.

Interest rates on long-term mortgages were hovering at about 6.8% in May, and have gone as low as 6.63% in recent weeks. This favorable financing climate has helped bring homeownership within reach of thousands of potential buyers, said Garczynski.

Sales rose in every region of the country in May. Garczynski added, “With the exceptional performance of the last several months, it’s likely that sales for all of 2002 will exceed last year’s record of 908,000.”

Publication date: 06/24/2002