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story.lead_photo.caption Model homes and for sale signs line the streets as construction continues at a housing plan in Zelienople, Pa., Wednesday, March 18, 2020. U.S. new home sales fell 4.4% in February with bigger declines expected in coming months as the coronavirus puts a major crimp on home sales. (AP Photo/Keith Srakocic)

WASHINGTON (AP) — Sales of new homes rose a sharp 13.8 percent in June, the second straight increase after two months when sales plunged as the country went into lockdown because of the coronavirus.

The Commerce Department reported Friday the June gain pushed sales of new homes to a seasonally adjusted annual rate of 776,000, a better-than-expected performance. The increase follows a 19.4 percent jump in May.

The two months of sales gains followed two months of sharp declines in March and April as much of the country went into lockdown.

A separate report Wednesday showed sales of previously owned homes surged 20.7 percent in June to a seasonally adjusted annual rate of 4.72 million. Even with the gain, which followed three months of declines, new home sales remain toughly 20 percent below pre-pandemic levels.

The median price of a new home sold in June increased to $329,200, up 5.6 percent from a year ago.

Economists are hoping for a further rebound in sales in coming months but caution that this expectation depends heavily on the course of the coronavirus. A recent resurgence in cases has caused some states to rollback their reopening plans.

Sales are being helped by ultra-low mortgage rates which earlier this month dropped below 3 percent for a 30-year-fixed rate mortgage for the first time in nearly 50 years.

Economists believe low rates and changes in home preferences brought on by the pandemic will combine to support further sales gains this year.

"Home sales are being supported by households' shifting preference for bigger spaces as more and more people work from home as well as lower mortgage rates," said Rubeela Farooqi, chief U.S. economist at High Frequency Economics.

In June, sales were up in all parts of the country with the biggest gain coming in the Northeast, a surge of 89.7 percent. Sales rose 18 percent in the West, 10.5 percent in the Midwest and 7.2 percent in the South.

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