US home sales rise more than expected

US home sales rise more than expected
© Reuters Limited
December 27, 2006


Sales of new US homes rose a higher-than-expected 3.4 per cent in November, but they were down 15.3 per cent from a year ago, a government report on Wednesday showed.

New single-family home sales rose to an annualized rate of 1.047m units from an upwardly revised rate of 1.013m units in October, the Commerce Department said.

Analysts polled by Reuters were expecting November sales to rise to 1.018 million rate from the previously reported rate of 1.004 units in October. The department also revised its figure for September sales higher.

After release of the report, stocks were little changed, US treasury bond prices fell and the dollar rose against major currencies.

In November, the median sales price of a new home rose 3.2 per cent to $251,700 from $243,800 in October.

The supply of homes available for sale at the current sales pace fell in November to 6.3 months’ worth from 6.7 months’ worth in October. There was a total of 545,000 homes available for sale at the end of November, down slightly from the 553,000 reported in October.

Some analysts read the new home sales data as a sign of growing health in the housing sector.

“The new home sales report did beat the consensus forecast, and that, I think, provides further evidence to support the view that the worst of the housing downturn may have passed,” said Alex Beuzelin, senior market analyst for Ruesch International in Washington DC.

A separate report on Wednesday showed US mortgage applications fell last week by 14.2 per cent to their lowest level since early August. The Mortgage Bankers Association said demand slipped both for home purchase loans and mortgage refinancings.

In the Northeast, new home sales rose 22.5 per cent. They were up 22.4 per cent in the Midwest, and they gained 19 per cent in the West. Sales fell 9.3 per cent in the South, the biggest region covered in the report.

Other reports suggested retail sales were lackluster in the week ahead of the Christmas holiday.

The International Council of Shopping Centers and UBS Securities said the year-on-year gain in U.S. chain stores sales slipped last week for a second straight time to stand just 1.7 per cent above year-ago levels. It was the weakest year-over-year reading since February 12, 2005.

Separately, Redbook Research said chain store sales were down 1.6 per cent this month through December 23 when compared with the same period in November.

“The Christmas week was on target for most, but no better,” Redbook Research said.