New home sales jumped 14% in September

Sales of new homes jumped 14% in September to the fastest pace in six months as strong demand helped off rising prices.

The Commerce Department reported Tuesday that sales of new single-family homes rose to a seasonally adjusted annual rate of 800,000 units last month after sales had fallen 1.4% in August. The September sales pace was the strongest since sales reached an annual rate of 873,000 in March.

The median price of a new home rose to $408,800 in September, up 9.5% from a year ago.

Prices are being pushed higher by strong demand and increases being faced by builders for because of shortages of critical building supplies such as lumber.

The report on new home sales followed news last week that sales of existing homes rose to a seasonally adjusted annual rate of 6.29 million units in September, the strongest pace since January.