US new home sales drop more than expected in December
Sales of new US single-family homes fell more than expected in December, according to data from the Commerce Department.
New home sales dropped by 9.3% to a seasonally-adjusted annual rate of 625,000 units, marking the biggest drop since August 2016 and a much steeper fall than the 7.9% expected by economists.
November’s sales pace was revised down to 689,000 from 733,000.
Compared to the same month a year ago, sales were up 14.%. Meanwhile, the median price of a new home was $335,400 compared to $334,900 in November.
Pantheon Macroeconomics said: "Overall, the net revision was -65K, which sounds substantial but remember that the margin of error in these numbers each month is huge, typically greater than +/-10%. The November number, originally estimated at 733K, always looked suspicious, standing far above the level implied by the mortgage applications numbers. What matters, behind all the noise, is the trend, which is rising slowly and should climb further over the first half.
"Prices are still rising, with the trend running at about 5% y/y, but note that inventory has crept higher since the middle of last year. The 6-month average is now 5.6 months, up from 5.2 months in June. That's still very low, but homebuilders likely won't want to see it rising much further."