Newly released housing data seem to justify builder optimism as new-home sales rebounded to their highest level in two-and-a-half years.
The Census Bureau reported Thursday morning that sales of newly constructed homes jumped 4.4% in November after falling 3.5% in October.
New-home sales rose to a 377,000 seasonally adjusted annual rate in November from a 361,000 rate in October. The October rate was revised downward by 7,000 units.
Overall, new-home sales are up 15.3% from a year ago.
A National Association of Home Builders/Wells Fargo Homebuilders Index has risen 27 points over the past year to 47. The HBI is very close to the 50 break-even level “signaling that more builders see conditions as good versus bad,” according to Wells Fargo Securities economists. They estimate new-homes sales will total 460,000 in 2013, up 26% from this year.
“The reversal in the HBI suggests that there is room for an upside surprise,” the WFS economists said in a Dec. 17 report.
But economist Patrick Newport at IHS Global Insight is concerned that the rate of new-home sales has hardly moved in the past six months, despite November’s increase.
“Although new-home sales rose to their highest level since April 2010, this was not a promising update,” Newport said shortly after the Census Bureau released Thursday’s report.
“Regionally, sales are inching up in the South, inching down in the other three regions and zigzagging sideways nationally,” he said.