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"The U.S. housing market appears to be shrugging off the recent jump in mortgage rates," said Sal Guatieri, an economist at BMO Capital Markets. Rising demand and a tight supply of available homes for sale have pushed up prices. The median price of a new home in June was $249,700, up 7.4 percent from a year ago. The number of new homes available for sale at the end of June was 161,000. That's only slightly higher than May's level and 11 percent above year-ago levels. At the current sales pace, it would take only 3.9 months to exhaust the supply of new homes on the market
-- matching a nine-year low. A supply of six months is typical in healthy markets. Limited homes on the market have kept sales from rising even faster. Still, higher prices, growing sales and the tight supply have made builders more optimistic about their prospects. That's led many to ramp up construction and add jobs. Builder confidence rose in July to the highest level in seven years, according to a NAHB survey. And customer traffic and builders' outlook for single-family home sales over the next six months are at the highest levels since the housing bubble burst in 2006.
[Associated
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