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US new home sales hit post-crisis record in 2016

[WASHINGTON] US sales of new single-family homes slowed in December but closed out the year at the fastest pace since before the 2008 financial crisis, the Commerce Department said Thursday.

Amid rising mortgage rates and home prices, the sales decline pointed to an end-of-year slowdown in the housing market, as sales of existing homes also slowed in December despite a record year.

New home sales fell 10.4 per cent compared to November, to an annual rate of 536,000 units, seasonally adjusted, which was 0.4 per cent below sales in December 2015.

An analyst consensus forecast had called for a significantly stronger result of 589,000 new home sales for the month.

Despite the decline in the final month of the year, the Commerce Department now estimates a total of 563,000 new homes were sold in 2016, the highest since 2007 when nearly 800,000 new homes changed hands.

The median sales price for new houses sold in December was US$332,500, up from US$309,200 in November. The supply of new houses for sale at the end of December stood at 5.8 months, with 259,000 homes on the market, up from five months in November.

Among his first moves since taking office last week, President Donald Trump on Monday canceled a decision by the previous administration to cut mortgage insurance premiums, although the measure had yet to take effect.

The reversal drew criticism from the real estate industry, with the National Association of Realtors saying as many as 40,000 potential new home buyers would be priced out of the market while up to 850,000 would see costs rise.

The NAR on Tuesday reported a 2.8 per cent decline in the sales of existing homes in December, attributed in part to rising mortgage rates, although sales for 2016 still set a 10-year record.


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