New US Home Sales Fall in December

Sales of newly constructed homes plunged in December as the housing market’s recovery sputtered.

New-home sales declined to a seasonally adjusted annual rate of 536,000, the Commerce Department said Thursday. That was 10.4% lower than an upwardly adjusted November pace of 598,000 and 0.4% lower than a year earlier.

Economists surveyed by MarketWatch had forecast a 595,000 rate.

The median sale price in December was $322,500, 4.3% higher than in November and 7.9% higher than in December 2015. Lower sales boosted available supply: At December’s selling pace, it would take 5.8 months to exhaust available inventory.

The government’s data on sales of new homes is notoriously choppy and often revised heavily. And the housing market has made uneven progress since the financial crisis and recession. Still, the trend in new-home sales, like in the broader market, is up: Commerce estimates 563,000 new homes were sold in 2016, 12.2% higher than in 2015, making 2016 the best year since 2007.

The stumble in December may reflect inventory that’s too tight to accommodate all would-be buyers. Builders have been reluctant to ramp up construction even as demand remains strong. Supply is only just creeping back to levels considered healthy.

via MarketWatch

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza