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New home sales in the U.S. unexpectedly saw a substantial increase in the month of July, according to a report released by the Commerce Department on Tuesday.
The report said new home sales jumped 12.4 percent to an annual rate of 654,000 in July from the revised June rate of 582,000.
The sharp increase in new home sales came as a surprise to economists, who had expected new home sales to drop to a rate of 580,000 from the 592,000 originally reported for the previous month.
With the unexpected increase, new home sales reached their highest annual rate since October of 2007.
The jump in new home sales was partly due to strength in the Northeast, where sales surged up by 40.0 percent to a rate of 35,000.
New home sales in the South also shot up by 18.1 percent to a rate of 398,000, while sales rose 1.2 percent in the Midwest and were flat in the West.
The report also said the median sales price of new houses sold in July was $294,600, down 5.1 percent from $310,500 from June and down 0.5 percent from $296,000 from the same month a year ago.
The seasonally adjusted estimate of new houses for sale at the end of July was 233,000, representing a supply of 4.3 months at the current sales rate.
On Wednesday, the National Association of Realtors is scheduled to release a report on existing home sales in the month of July.
