U.S. home sales reach seven year high

In light of recent job gains and lower mortgage rates, Americans bought new homes at the fastest rate in seven years, this August.

ABC News reports that new home sales increased 5.7 percent, the fastest rate since February 2008. This increase is following a 12 percent jump in July, according to government figures.

Smaller price increases and a healthier job market helped push sales, following the economic downturn that ended in 2009. Home sales are up 22 percent this year.

While home sales data is often adjusted heavily in following months, economists are enthusiastic about the increase. The outlook for home building is the most optimistic it has been in a decade. There has been a limited supply of new homes. Construction increases could lead to more sales. These sales could increase demand, as well as create new jobs in construction and other services.

Last year, builders increased prices aggressively, weighing on sales numbers. Scaling back on increases this year has attracted buyers and purchases.

Janet Yellen, Federal Reserve Chair expects improvement in the housing market as more individuals find jobs, and younger Americans move out on their own.

Buyers have fewer homes to choose from than normal. In August, only 216,000 new homes were up for sale, only enough to last for around 4 month at current sales pace. Typically, that number is around the six month mark, making the current rate lower than prior years.

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