Sales of new homes in August rose sharply to a seven-year high, increasing 5.7 percent to a seasonally-adjusted annual rate (SAAR) of 552,000, well above forecasts of economists surveyed by Bloomberg. July’s rate was revised upward to 522,000 from 507,000, according to the Commerce Dept., as homebuyers continue to take advantage of historically low interest rates.

The median forecasts of the economists was 515,000, while the median sale price rose 0.3 percent from August of 2014 to $292,700, as nationalmortggenews informs MHProNews.

However, drawbacks to the housing market recovery remain: existing-home sales fell in August 4.8 percent to a 5.31 annual rate, and housing starts fell three percent in August, even though permits to build single-family homes rose to the highest level in seven years.

Most telling, perhaps, is Federal Reserve’s head Janet Yellen saying the housing market remains “very depressed” given that strengthening employment should provide more support to the housing sector. ##

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Article submitted by Matthew J. Silver to Daily Business News- MHProNews.