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US new home sales rise in November; momentum slows
[WASHINGTON] New US single-family home sales in November rose less than expected and the prior month's increase was revised down, suggesting some loss of momentum in the housing market.
The Commerce Department said on Wednesday sales increased 4.3 per cent to a seasonally adjusted annual rate of 490,000 units. October's sales pace was revised down to 470,000 units from the previously reported 495,000 units.
Economists polled by Reuters had forecast new home sales, which account for about 9.3 per cent of the housing market, rising to a rate of 505,000 units last month. Sales were up 9.1 per cent compared to November of last year.
Despite the signs of some loss of momentum, last month's increase in new home sales should help allay concerns of an abrupt slowdown in activity after a report on Tuesday showed a surprising plunge in homes resales.
Sales of previously owned homes tumbled 10.5 per cent in November, according to the National Association of Realtors. Realtors and economists blamed the large drop on new regulations that were delaying contract closings.
New home sales are counted when contracts are signed, meaning they likely were unaffected by the new mortgage disclosure rules, which have lengthened the closing time for home purchase contracts.
A rebound in sales of existing home sales is expected in December as the housing market remains supported by a tightening jobs market, which is gradually lifting wages.
New home sales tumbled 28.6 per cent in the Northeast, but retained the bulk of October's 84.2 per cent surge. Sales rose 4.5 per cent in the populous South and jumped 20.5 per cent in the Midwest. They fell 8.6 per cent in the West.
The inventory of new homes on the market increased 2.2 per cent to 232,000 last month, the highest since January 2010. While builders have ramped up construction, in part encouraged by high prices, the supply of new homes remains less than half of what it was at the height of the housing boom.
At November's sales pace it would take 5.7 months to clear the supply of houses on the market, down from 5.8 months in October. The median price of a new home increased 0.8 per cent from a year ago to US$305,000.