NEW HOME SALES SURGE IN AUGUST

New home sales rose 18% to an annualized pace of 504,000 in August.

Expectations were for new home sales to increase 4.4% to an annualized rate of 430,000 in August.

On Twitter, Bespoke Investment Group said this is the largest beat for new home sales relative to expectations since May 2010.

Broken down by region, new homes sold during August were up significantly in the western part of the country, with homes sold in that region increasing 50% month-over-month and 84.3% year-over-year.

July's rate, which was initially reported as a2.4% decline to an annualized pace of 412,000 in July, was revised upwards to 427,000.

The latest new home sales report from the US Census indicated that the seasonally adjusted estimate for new home sales at the end of August was 203,000, representing 4.8 months of supply and the current sales rate.

The median sales price of new homes in August was $275,600, and the average sales price was $347,900.

In a note following the report, Ian Shepherdson at Pantheon Macro said, "In one line: Breakout from the range of the past 18 months, but mixed signals re sustainability."

Here's a chart from Pantheon showing Wednesday's breakout report.