WASHINGTON (AP) -- The Commerce Department reports on sales of new homes in July. The report will be released Monday at 10 a.m. Eastern.
SALES RISE: Economists forecast that sales of new homes rose 5.9 percent last month to a seasonally adjusted annual rate of 430,000, according to a survey by the data firm FactSet. In June, purchases of new homes plunged 8.1 percent to an annual rate of 406,000.
SUMMER REBOUND: Real estate sales have slumped for much of 2014, after steadily recovering from the depths of the recession. The combination of rising prices last year, stagnant wages and higher interest rates have dampened sales. But there are multiple signs that the pace of buying has recently improved, although lagging much of last year's performance.
Sales of existing homes rose 2.4 percent in July to a seasonally adjusted annual rate of 5.15 million, the National Association of Realtors reported last week. That's the fourth consecutive monthly increase and the highest annual rate since September of last year.
The report showed that "distressed" sales are making up a lower share of purchases. Sales are distressed when they are the result of foreclosures or involve homes for which the seller owed more on their mortgage than the home was worth.
Distressed sales accounted 9 percent of the purchases in July — the lowest share since the association began tracking the figure in October 2008. Distressed sales, which tend to drag down neighborhood prices, accounted for 36 percent of sales in 2009.
Separately, construction starts climbed 15.7 percent in July to a seasonally adjusted annual rate of 1.1 million homes, the government said. Applications for building permits, a gauge of future activity, also rose last month.
Also, the National Association of Home Builders and Wells Fargo's index of builder sentiment rose in August to 55, up two points from a revised 53 for July. Readings above 50 indicate more builders view sales conditions as improving.
At the same time, price gains have started to slow and mortgage rates have dropped since the start of 2014. That could help boost sales.
And the average rate for a 30-year mortgage fell to 4.1 percent this week, the lowest level this year, according to Freddie Mac. At the beginning of the year, the average rate was 4.53 percent.
- Real Estate