(Photo: Reuters)
The Commerce Department reported on Wednesday new home sales rose 4.3% last month to an annualized rate of 490,000 single-family units, missing the 505,000 forecast.
Economists polled by Reuters had forecast new home sales, which account for about 9.3 percent of the housing market, rising to a rate of 505,000 units last month. Sales were up 9.1 percent compared to November of last year.
Still, the data will likely help in tamping down concern over the housing market in the face of the Federal Reserve announcing the first rate hike in seven years, as well as sales of previously owned homes tumbling 10.5% in November. The National Association of Realtors (NAR) reported on Tuesday existing home sales of single-family homes tanked to an annualized rate of 4.76 million units, far missing expectations. Realtors and NAR’s chief economists blamed the steep decline on new regulations that were delaying contract closings.
“Sparse inventory and affordability issues continue to impede a large pool of buyers’ ability to buy, which is holding back sales,” said Lawrence Yun, chief economist at NAR. “However, signed contracts have remained mostly steady in recent months, and properties sold faster in November. Therefore it’s highly possible the stark sales decline wasn’t because of sudden, withering demand.”
At November’s sales pace it would take 5.7 months to go through the supply in the housing market, down from 5.8 months in October. The median price of a new home increased 0.8 percent from a year ago to $305,000.
