New home sales in August soared 20% compared with July, reaching their highest level since January 2022, according to the United States Census.
This also marks the largest one-month gain since August 2022 and was well above economists' forecasts.
Analysts said the rise was propelled by price discounts and other sales incentives from builders, who are grappling with an oversupply of newly-built homes for sale.
A separate survey from the National Association of Home Builders found that 39% of builders reported cutting prices in September, up from 37% in August and the highest percentage in the post-COVID period.
Despite these cuts, the median price of a new home sold in August still rose 1.9% year-over-year to US$413,500.
New homes also only account for around 14% of U.S. home sales.
The figures are based on people shopping and signing deals in August, when the average 30-year fixed mortgage was higher than it is today.
In August, the rate started at 6.62% and didn’t move much during the month, according to Mortgage News Daily.
Interest rates have since begun a sharp decline in September, when they fell to a three-year low of 6.13% the day before the Federal Reserve cut its lending rate, causing it to move higher to where it is now at 6.37%.
