Sales of New Homes Near Two-Year High

Housing continues recovery; rest of economy, not so much

Purchases of new U.S. homes hovered in August near a two-year high, adding to signs that the housing market is on the way to recovery.

Sales fell 0.3 percent to a 373,000 annual pace following a revised 374,000 rate in July that was higher than previously estimated and the strongest since April 2010, figures from the Commerce Department showed today in Washington. The median estimate of 71 economists surveyed by Bloomberg called for a rise to 380,000.

Record-low borrowing costs continue to attract buyers, lifting demand for homebuilders, while a drop in the supply of foreclosed homes is easing downward pressure on prices. Federal Reserve policy makers have targeted the housing market with further accommodation measures in order to spur growth and reduce unemployment.