According to the latest data released by the U.S. Department of Commerce, new home sales in July reached their highest level since October 2007. The ongoing robust recovery in the housing market is boosting the U.S. economy, leading institutions to anticipate a rebound in U.S. economic growth during the second half of the year. Moreover, if economic indicators remain strong enough, the possibility of the Federal Reserve raising interest rates again in September cannot be ruled out.
　　Economic growth is showing signs of recovery.
　　Recently, the U.S. released a series of economic data that outperformed expectations, with the housing market standing out as a major bright spot. In July, new home sales in the U.S. surged 12.4% from the previous month, reaching an annualized pace of 654,000 units—the highest level since the financial crisis—and marking a year-over-year increase of an impressive 31.3%. Driven by this sharp rise in sales, the supply-to-sales ratio for new homes dropped to 4.3 months, meaning that at the current rate of sales, it would take just 4.3 months to deplete the existing inventory of newly built homes.
　　Additionally, according to previously released data, U.S. housing starts in July reached an annualized rate of 1.211 million units, the highest level since February. A survey of residential builders revealed that market confidence rose in August, with builders expressing optimism about both current home sales and those expected over the next six months. Meanwhile, figures from the National Association of Realtors show that U.S. existing-home sales climbed to their highest level since February 2007 in June.
　　After hitting bottom and beginning its rebound in 2012, the U.S. housing market has consistently served as one of the key engines driving economic recovery. Although U.S. GDP grew by just 1.2% in the second quarter of this year, residential construction spending surged by 6.6%. Analysts attribute the strong performance of the U.S. housing market primarily to historically low mortgage interest rates, improving household incomes, and a robust labor market.
　　Recently, "stock market guru" Warren Buffett, in an interview, also expressed strong confidence in the U.S. economy and remains bullish on the U.S. real estate market. He believes that the country's steadily growing population will ultimately benefit the U.S. housing market.
　 　In addition to real estate data, other key economic indicators also showed signs of improvement compared to the first half of the year. Data released on the 23rd revealed that the U.S. manufacturing Purchasing Managers' Index (PMI) edged down slightly to 52.1 in August, yet remained near its highest level of the year. According to Williamson, Chief Business Economist at IHS Markit, based on the figures from July and August, U.S. manufacturing is experiencing "the strongest growth period of the year" in the third quarter— a trend that is expected to boost GDP expansion.
　　September rate hike likely to increase
　 　Driven by strong economic data, institutions expect the U.S. economy to accelerate in the second half of the year. According to Nomura Securities' latest research report, the U.S. economy will gain stronger momentum in the third quarter. After losing steam earlier this year, consumer spending rebounded and picked up pace again in the second quarter. Analysts predict that personal consumption will remain the primary driver of U.S. economic growth in 2016, while housing investment is also expected to contribute positively to the nation's economic expansion.
　　Nomura Securities forecasts that the U.S. economy will grow at 2% in the second half of the year, but the Federal Reserve is still waiting for further evidence of economic expansion before taking any action. As a result, the firm expects the Fed’s most likely timing for a rate hike to be in December of this year.
　　Although most institutions still expect the Federal Reserve to delay raising interest rates until after the end of the year, market expectations for a rate hike in September have begun to rise following the release of new-home sales data on the 23rd. CME Group’s Fed Fund Rate futures now indicate that investor confidence in a September rate increase has climbed from 15% to 21%, while the likelihood of a rate hike by year-end has surged above 50%.
　 　Financial journalist Hissenrat, often dubbed the "Fed News Agency," said on the 23rd that although the U.S. unemployment rate remains below 5% and inflation is steadily moving toward the Fed's 2% target, the central bank still harbors significant doubts and uncertainties about the economy. Factors such as slowing wage growth and the upcoming U.S. election are adding to the Fed's concerns. Nevertheless, it’s expected that Fed Chair Yellen will likely keep the option open for an interest-rate hike later this year during her speech at this Friday’s global central bankers’ annual meeting. Moreover, if economic data continue to strengthen, the Fed might even act as early as September.
　　Haysenrat stated that if August's nonfarm payrolls increase by at least 200,000, or if the unemployment rate continues to fall, it could prompt the Federal Reserve to take action.
　　Last week, New York Fed President Dudley stated that the U.S. economy has made broad progress, and the Federal Reserve could potentially raise interest rates as early as September. Dudley is widely regarded as one of the Fed officials whose views are closest to those of Yellen.