U.S. new home sales jumped a surprising 9.4 percent in August, the fastest acceleration of sales in almost four years, as a fresh dip in mortgage interest rates attracted buyers, a government report showed on Monday.
Sales of new single-family homes climbed to a seasonally adjusted annual rate of 1.184 million units from a downwardly revised 1.082 million units the month before, the Commerce Department said. It was the sharpest climb since December 2000.
Analysts polled by Reuters were expecting sales to rise to a 1.165 million pace.
Housing remains strong, helped by declining interest rates, economists said.
"People are just in love with homes right now. We are seeing a lot new builds," said Bob Walters, chief economist for Quicken Loans.
Analysts said there were surprised at the strength of home sales, given the violent storms that rocked Florida in August.
Inventories rose to 404,000 homes available sale, the largest amount since October 1979, but the supply of homes available at the current sales pace dipped to 4.2 months.
Mortgage rates crept higher in early summer on expectations of a strengthening U.S. economy, but have slid since then.
New home sales had declined in both July and June.
Resales of U.S. homes fell 2.7 percent in August, decreasing more than expected, the National Association of Realtors reported last week.
Sales of new homes are a closer reflection of current mortgage rate trends. New home sales are recorded when a buyer signs a contract whether the home is built or not. However, sales of homes that are already owned are recorded on the closing of a sale, and reflect mortgage rates up to 60 days prior to the closing.
New home sales surged 12.6 percent in the South, the region with the biggest volume. Sales rose 19.5 percent in the West and 6.1 percent in the Northeast, but slid 8.3 percent in the Midwest.
