US new home sales beat forecasts by wide margin in July

New home sales Stateside rose sharply in July, far surpassing economists' forecasts, buoyed by activity in the Northeast.

In annualised terms, the rate of new home sales shot higher by 12.4% over the month to 654,000, according to the Department of Commerce.

Economists had penciled in a reading of 575,000.

Sales in the Northeeast rocketed by 40.0% over the month.

July's gain in sales pushed the stock of homes available for sale down from the equiavlent of 4.9 months' of sales to 4.3 months.

Home prices were also on the up in July, with the median price of a newly sold home rising from 282,800 to 296,400 and the average price jumping from 345,500 to 360,600.

"This looks great, but remember that the margin of error in the new home sales number is enormous - this month, it's +/-12.7% - so the reported increase might not have happened at all. And if the number stands, it is quite hard to see what might drive a further increase, given that mortgage applications have dipped in recent months," said Ian Shepherdson, chief economist at Pantheon Macroeconomics.

"[...] Lenders appear to have tightened credit standards since the turn of the year, and we wonder if this is responsible for the dip in mortgage applications."