Aug. 26 (Bloomberg) -- Purchases of new homes in the U.S. jumped more than forecast in July, adding to signs the economy is rebounding from the worst recession since the 1930s.
Sales increased 9.6 percent, the most since February 2005, to a 433,000 annual pace, figures from the Commerce Department showed today in Washington. The number of houses on the market dropped to the lowest level in 16 years.
The gain, together with rising sales of existing homes and steadying prices, indicates the housing slump may be ending as Federal Reserve efforts to thaw credit and the Obama administration's first-time home buyer incentives lift demand. Job losses and mounting foreclosures mean any rebound in construction may be limited.
``The housing market is bottoming out,'' Conrad DeQuadros, a senior economist at RDQ Economics in New York, said before the report. At the same time, ``it's not going to turn around very quickly.''
