Friday, March 31, 2023

Home sales in the United States unexpectedly drop to lowest point since June

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New home sales in the United States have fallen to five-month low, suggesting searing demand is cooling amid resurgent COVID-19 cases other signs of an economic slowdown.

Purchases of new single-family homes fell 11% to an annualized rate of 841,000 in November from a revised downward rate of 945,000 the month before, government data showed Wednesday. The median projection from a Bloomberg survey of economists was 995,000. The median selling price rose 2.2% from the previous year to $ 335,300.

The data weakens the housing status a bit as a bright spot in an otherwise fragile economy, and lower sales may reflect a lack of on-hand inventory as builders struggle to meet demand fueled by mortgage rates extremely low. Affordability could also play a role, although a new $ 900 billion stimulus package, approved by Congress on Monday, may boost family finances and keep demand robust.

Shares of US residential construction companies fell after the report.

A report Tuesdayshownthat sales of previously owned homes also fell in November, with soaring prices and record supply limiting demand.

Wednesday’s report showed that the number of properties sold for which construction had not yet started fell to a four-month low of 288,000 in November, while the number of homes for sale edged up to 286,000 .

At the current pace of sales, it would take 4.1 months to exhaust supply, the highest since June.

The decline in sales was concentrated in the Western and Midwestern regions. The pace of 59,000 in the Midwest was the lowest since the start of 2016, while the South and West each recorded their lowest totals since June.

The New Home Sales Report, released jointly by the Census Bureau and the Department of Housing and Urban Development, tends to be volatile from month to month, often with significant revisions.

More to read absolutely financial cover of Fortune:


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