US new-home sales unexpectedly increase for a second month

SALES of new US homes unexpectedly rose in November, suggesting some stabilisation in demand as mortgage rates eased late in the month from their highs.

Purchases of new single-family homes increased 5.8 per cent to an annualized 640,000 pace last month after rising in October, government data showed Friday (Dec 23). The median estimate in a Bloomberg survey of economists called for a 600,000 rate.

A mid-month retreat in 30-year mortgage rates back below 7 per cent along with an increase in builder incentives may have helped support demand. Still, the sales data are volatile from month to month. With home prices remaining elevated and the Federal Reserve poised to raise interest rates further, headwinds for the housing market will persist into 2023.

A report earlier this week showed homebuilder sentiment has declined every month this year, the longest stretch on record. BLOOMBERG