US new-home sales tumble to near 1-year low

GMT 19:23 2015 Monday ,26 October

Arab Today, arab today US new-home sales tumble to near 1-year low

New-home sales fell in all four regions of the country
Washington - AFP

New-home sales in the United States tumbled to a 10-month low in September, stirring concerns about the economy, but analysts said the overall housing market continues to grow steadily.

The Commerce Department reported Monday that sales of new single-family houses fell to an annual rate of 468,000 last month, compared to 529,000 in August.

It was the lowest reading since November 2014.

But the often volatile report came after two months of gains, and the pace of sales was still up 2.0 percent from a year ago.

In another sign of strength, the median sales price of new houses rose 2.4 percent in the month, to $296,900.

"While disappointing, the September numbers are not indicative of a downturn," said Andres Carbacho-Burgos of Moody's Analytics.

"The three-month average of new home sales in September was down less than a percent from the prior month and is nearly 14 percent higher than the three-month trend in September 2014," said Kristin Reynolds at IHS Global Insight.

Housing has been a key growth sector and generator of new jobs, and is watched closely for weakness. Ultra-low interest rates and falling unemployment have supported strong sales.

New-home sales fell in all four regions of the country last month, with by far the largest drag in the chronically underperforming Northeast, where sales plunged almost 62 percent.

Slower new home sales contrasted with activity in the market for existing homes -- the majority of the housing market. Sales soared last month to an annual rate of 5.55 million units, the National Association of Realtors reported last week.

Economists noted that the new-home sales data is highly volatile and subject to significant revisions.

Ian Shepherdson of Pantheon Macroneconomics called the new-home sales report "the single least-reliable monthly economic indicator."

"This report appears utterly baffling given the strength of the NAHB homebuilder index, now at a decade-high," he said.

Last week the National Association of Home Builders predicted the housing market would remain "on a gradual upward trend in 2016."

The NAHB forecast an 11 percent rise in single-family housing starts this year from 2014, and a jump of 27 percent in 2016.

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