WASHINGTON — Demand for new U.S. homes rose more than forecast in May as mortgage rates dropped, bolstering the residential real-estate market while other parts of the world’s largest economy cool.
Purchases climbed to a 369,000 annual rate, the most since April 2010 and up 7.6 percent from the previous month, the Commerce Department reported Monday in Washington. The median estimate in a Bloomberg News survey of 67 economists was 347,000. The number of houses on the market held near a record low.
Falling borrowing costs may keep luring buyers to builders such as Toll Brothers Inc., even as a cooling job market and limited access to credit restrain the recovery. The Federal Reserve last week extended a program to keep long-term interest rates low in a bid to reduce unemployment, sustain housing and prevent a global slowdown from stalling the expansion.
“It’s another sign of life in the housing sector,” said Brian Jones, a senior U.S. economist for Societe Generale in New York, who forecast a gain to 362,000. “It’s consistent with a gradual improvement in activity, but we’ve got miles to go before we get back to normal.” Bloomberg News
