Low mortgage rates appear to be propping up the U.S. housing market as seen in a resurgence of new home sales in August. According to the Department of Commerce, sales of newly-constructed homes increased 7.1 percent on a month-over-month basis to a seasonally adjusted annual rate of 713,000, just shy of the 12-year high of 729, 000 set in June.
A drop in mortgage rates over the summer bolstered what was expected to be an otherwise unremarkable home-buying season. In addition, the low rates led to an increase in home-building activity as builders see the lower borrowing costs as an opportunity to push sales.
Demand for new housing is expected to remain high as the supply of homes available for sale remains low.
Today, conforming no-point 30-year fixed mortgage rates are averaging 3.75 percent and 15-year rates are near 3.375 percent.
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