WASHINGTON (AP) -- The Commerce Department reports on sales of new homes in May at 10 a.m. Eastern Tuesday.
SLIGHT INCREASE: Economists expect a 0.1 percent increase in new-home sales to a seasonally adjusted annual rate of 525,000, according to a survey by data the firm FactSet.
More Americans are buying new homes, an increase fueled by the solid pace of hiring over the past year and low but rising mortgage rates that have impelled people to finalize sales quickly. During the first four months of 2014, sales have climbed 23.7 percent compared with the year prior.
MORE BUYERS: Homebuilders have broken ground on more houses this year and plan to continue construction. Approved building permits rose increased 11.8 percent to an annual rate of 1.28 million, the highest level since August 2007, the Commerce Department reported last week.
Existing homes are also seeing strong sales as the economy continues to muscle up.
Sales of existing homes climbed 5.1 percent in May to a seasonally adjusted annual rate of 5.35 million, the National Association of Realtors said Monday. Tight supplies have lifted prices, which have climbed 7.9 percent over the past 12 months to an average of $228,700, about $1,700 below the July 2006 peak.
Much of the increased buying activity flows from a stronger job market and relatively affordable mortgage rates.
Employers have added 3.1 million jobs over the past year, causing the unemployment rate to fall to 5.5 percent from 6.3percent.
Borrowing costs are low by historical standards, but they have been rising in recent weeks at a speed that might prompt more people to buy homes.
Average 30-year fixed rates were 4 percent last week, according to the mortgage giant Freddie Mac. That average has increased from a 52-week low of 3.59 percent.
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