According to The Commerce Department, July New Home Sales surged 12.4% from the prior month to seasonally-adjusted annual rate of 654,000 units. This marks the highest pace since October 2007. Analysts had expected a much slower 580,000 unit annualized pace.
Sales rose 31.3% from the year-ago period, further bolstering the narrative of a now several year-long housing recovery.
In the same report, June’s sales pace was revised down to 582,000 units from a prior report of 592,000 units.
The SPDR S&P Homebuilders ETF (NYSE:XHB) and iShares Dow Jones US Home Construction ETF (NYSE:ITB) both rose more than 1.5% in Tuesday morning trading following the report.
XHB has now gained about 6.4% year-to-date:
While ITB has edged XHB out on performance, rising 7.7% since the start of the year:
ITB also holds the edge in assets under management, with about $1.437 billion versus the XHB’s $1.183 billion.