New-home sales surge in Northeast in July

Americans stepped up their purchases of new homes in July, with sales surging in the Northeast.

The Commerce Department says new-home sales rose 5.4 percent last month to a seasonally adjusted annual rate of 507,000, recovering from a slide in purchases in June.

Buyers have crowded into the housing market this year. Backed by solid job growth over the past two years and relatively low mortgage rates, sales of new homes jumped 21.2 percent through the first half of 2015, although the government sales report is volatile on a monthly basis.

New-home purchases climbed 23.1 percent in the Northeast, with smaller gains in the South and West. Sales slumped in the Midwest.

Housing is once again driving growth as the stock market has stumbled. Americans have felt more confident about their economic prospects, causing them to return to the housing market. But supplies of new and existing homes have been tight, pushing up prices and limiting choices for would-be buyers.

There is a 5.2-month supply of new homes available, compared to six months in a healthy market. The shortage of listings has enabled the median price to rise 2 percent over the past 12 months to $285,900.

Separately, Standard & Poor's/Case-Shiller 20-city home price index has risen 5 percent in June from a year earlier.-- AP