New home sales for

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New Home Sales

Released On 1/27/2014 10:00:00 AM For Dec, 2013 Prior Prior Revised Consensus Consensus Range Actual New Home Sales - Level - SAAR 464 K 445 K 450 K 420 K to 471 K 414 K

Highlights New home sales had been a bright spot in the housing sector -- but not any more. Sales of new homes nose dived in December, to a 414,000 annual rate that's below the low end estimate of Econoday's consensus. More bad news comes from downward revisions that total 30,000 in the prior two months. The drop in sales gave a lift to supply, at least supply relative to sales which is at 5.0 months vs 4.7 months in November. But the total number of new homes on the market actually fell, down 5,000 to an adjusted 171,000. High prices are no doubt a factor behind the sales weakness but not a pronounced factor. The median price rose 0.6 percent to $270,200 with the year-on-year rate very modest at plus 4.6 percent which is right in line with the plus 4.6 percent year-on-year rate for sales. Bad weather may have played a factor in December's disappointment but heavy weather is common to all Decembers. Unattractive mortgage rates and the still soft jobs market appear to be holding down housing noticeably. On Thursday, watch for pending home sales data which track initial contract signings for sales of existing homes. The Dow is little changed following today's results.

Market Consensus before announcement New home sales fell 2.1 percent in a deceptive November reading where the 464,000 annual sales rate exceeded what were solid expectations but looked soft against a sharply upward revised October, now at 474,000 versus an initial reading of 444,000. Underscoring the October revision was an even sharper upward revision to September, to 403,000 from 354,000. One factor favoring sellers is supply which was very thin at 4.3 months at the current sales rate versus 4.5 months in October. New homes on the market fell 12,000 in the month to 167,000.

Definition New home sales measure the number of newly constructed homes with a committed sale during the month. The level of new home sales indicates housing market trends and, in turn, economic momentum and consumer purchases of furniture and appliances.  Why Investors Care

There is no question that lower interest rates boost home sales. Other factors also impact housing decisions, such as employment and income growth, and wealth stemming from stock market gains. Data Source: Haver Analytics

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