U.S. New-Home Sales Surged in November to Highest Since 2007By
U.S. purchases of new homes unexpectedly surged in November to the highest level since before the last recession, indicating resilient demand, according to government data Friday.
Highlights of New-Home Sales (November)
The report showed that residential construction will increase in coming months and provide fuel for the economy. In another sign builders will stay busy, the number of properties sold in which construction hadn’t yet started increased almost 43 percent to 258,000 in November, the most since December 2006.
While stronger results in the South probably reflected some boost from post-hurricane recovery efforts in the region, sales surged in the western U.S. and also increased in the Midwest and Northeast.
Housing demand is benefiting from a strong job market and still- low mortgage costs. New-home sales, tabulated when contracts get signed, account for about 10 percent of the market. They’re considered a timelier barometer than purchases of previously owned homes, which are calculated when contracts close and are reported by the National Association of Realtors.
What Our Economists Say...“This is a barn-burner of a report. While there is likely some upward bias coming from the South due to hurricane recovery, the surge in the West and solid gain in the Northeast, as well, likely signal some homeowners rushing to close deals before new tax changes take effect in 2018. This year-end scramble will likely carry into the December data, as well. The risk is that it is pulling demand forward into 2017, and could then lead to prolonged soft patch in early 2018. Inventory scarcity will be a positive development for homebuilders in the near term.”
-- Carl Riccadonna, Bloomberg Economics
- Supply of homes at current sales rate fell to 4.6 months from 5.4 months; 283,000 new houses were on market at end of November
- Commerce Department said there was 90 percent confidence that the change in sales last month ranged from a 7.1 percent gain to a 27.9 percent increase, underscoring the volatility of the data
- Report released jointly by the Census Bureau and Department of Housing and Urban Development in Washington
— With assistance by Jordan Yadoo