US new home sales forge higher in December

WASHINGTON: Sales of new US homes unexpectedly rose to a seven-month high in December, after an extended bout of weakness in the housing market, according to government data released.

However, the increase at the end of the year came because of a sharp downward revision in previously-reported November sales, according to the Commerce Department.

Meanwhile, prices rose while supplies held steady.

Sales of new single-family homes rose 3.7 per cent in December to an annual rate of 621,000 units, the fastest pace since May. Economists had forecast a 4.5 per cent increase.

Despite the gain, December 2018 was still 2.4 per cent below the sales level 12 months earlier.

Officials also warn housing numbers are subject to major revisions and clear trends may not emerge for six months.

The pickup at the end of 2018 could reverse a long decline since November 2017 that caused analysts to worry the US economy had peaked.

But gains in construction and a recent decline in mortgage loan rates have helped ease some pressures on the market.

Median new home prices rose 4.8 per cent to US$318,000, reversing some of November’s losses. Inventories rose ticked higher to 344,000 units on the market, making for a 6.6 month supply at the current sales rate, slightly lower than in November.

Ian Shepherdson of Pantheon Macroeconomics said the sharp downward revision for November was “a reminder not to take the monthly new home sales very seriously.” — AFP