U.S. purchases of new homes declined more than projected last month and were revised down in the prior period, showing the market returned to a less exuberant pace as the year drew to a close, according to government data Thursday.

Highlights of New-Home Sales (December)

Single-family home sales fell 9.3% m/m, the most since Aug. 2016, to 625k annualized pace (est. 675k) after 689k rate (revised from 733k) Median sales price increased 2.6% y/y to $335,400 Supply of homes at current sales rate rose to 5.7 months from 4.9 months; 295,000 new houses were on market at end of December Purchases totaled 608k in 2017, up from 561k a year earlier

Key Takeaways

The strongest annual sales in a decade reflect an improvement in fundamentals including robust job growth, historically low mortgage rates and a boost in home-equity values.

Steady growth in housing demand, December’s decline notwithstanding, indicate new residential construction will remain firm into the spring selling season.

New-home sales, tabulated when contracts get signed, account for about 10% 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.

Other Details

Purchases fell in all four U.S. regions, led by a 10% drop in the Midwest and a 9.8 percent slide in the South Commerce Department said there was 90% confidence that the change in sales last month ranged from a 20.3% decrease to a 1.7% increase, underscoring the volatility of the data Report released jointly by the Census Bureau and Department of Housing and Urban Development in Washington.