U.S. new-home sales unexpectedly rose in July to the second-highest level on record, as job and income growth kept housing strong despite a rise in mortgage rates, government figures showed today.

New single-family home sales rose 0.1% in July, to 980,000 units at a seasonally adjusted annual rate, the Commerce Department said. This annual rate of unit sales has been exceeded only in November when the pace was a record 985,000.

Moreover, the department revised June's sales pace upward, to 979,000 units -- a 7.3% increase from May -- previously reported as 929,000.

"We continue to see very strong demand out in the marketplace right now," said Jim Zeumer, vice president of Pulte Corp. of Bloomington Hills, Mich., the nation's largest home builder.

Treasury bonds fell after the report, which showed that July sales exceeded analysts' consensus forecast of a 914,000 rate.

Analysts said they were surprised at the strength of the new-home sales market because mortgage rates rose in July. The average rate for a 30-year, fixed-rate mortgage rose to 7.63%, from 7.55% in June, according to the average of weekly statistics compiled by Freddie Mac.

Sales rose in three regions but fell in the West.

In the South, sales were up 0.2%, to a record 470,000-unit annual rate. In the Northeast, they rose 33.9%, to a rate of 83,000, the highest since January; and in the Midwest 9.9%, to a 178,000 rate, the strongest pace since February and the third-highest on record. In the West, sales fell 12.9%, to a 249,000 rate.

The inventory of new homes for sale at the current pace was unchanged in July, at a 3.8-month supply; the number of homes for sale rose to 311,000 at an annual rate. That was the highest number of homes for sale since December 1996.

The median price for a new home increased 0.6% in July, to $156,000, from June's $155,000. July's median price is 2.3% higher than the $152,500 median a year earlier.

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