New-home sales fall to five-month low, missing forecasts
Sales of new homes cooled for a third month in December, signaling a potential pullback after purchases climbed to some of the best levels in more than a decade amid lower borrowing costs and a solid labor market.
Single-family home sales fell 0.4% to a 694,000 annualized pace, the weakest since July and below all economist estimates in Bloomberg's survey, while the November figure was revised down to 697,000, government data showed Monday. The median sales price edged up 0.5% from a year earlier to $331,400.
Despite signs of softening, new-home sales remain near post-recession highs amid lower borrowing costs following three Federal Reserve interest-rate cuts last year. Recent strength, however, has boosted residential construction, and in turn helped contribute more to gross domestic product.
Other recent reports have indicated fresh strength in housing. Existing-home sales, which account for about 90% of U.S. housing, jumped in December to the best pace in nearly two years amid the leanest inventories on record. Pending home sales also have remained resilient.
Purchases of new homes fell in the South, the largest region, and the Northeast, while they climbed in the Midwest and West.
Economists in Bloomberg's survey projected an annualized pace of 730,000 new-home sales for November. Estimates ranged from 700,000 to 764,000.
There were signs that the inventory squeeze may get some relief. The supply of homes at the current sales rose to 5.7 months from 5.5 months in the prior month, while the number of properties sold for which construction hadn’t yet started increased to a six-month high of 214,000.
New-home purchases account for about 10% of the market and are calculated when contracts are signed. They are considered a timelier barometer than purchases of previously owned homes, which are calculated when contracts close.
The figures, which tend to be volatile, are published jointly by the U.S. Census Bureau and the Department of Housing and Urban Development.