U.S. New-Home Sales Fall More Than Forecast in December

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.