U.S. new home sales post third straight monthly gain

Applied Energetics

26/01/2023 15:31

WASHINGTON, Jan 26 (Reuters) - Sales of new U.S.
single-family homes increased for a third straight month in
December as mortgage rates continued to decline, offering hope
that the struggling housing market was starting to stabilize.
    New home sales increased 2.3% to a seasonally adjusted
annual rate of 616,000 units last month, the Commerce Department
said on Thursday. November's sales pace was revised lower to
602,000 units from the previously reported 640,000.
    Sales rose in the Midwest and South, which are generally
considered affordable regions. They fell in the Northeast and
West. Economists polled by Reuters had forecast new home sales,
which account for a small share of U.S. home sales, falling to a
rate of 617,000 units. Sales dropped 26.6% year on year in
December. They decreased 16.4% in 2022.
    The Federal Reserve's fastest interest rate-hiking cycle
since the 1980s has driven housing into recession. Falling
mortgage rates have, however, raised hope that the housing
market could soon stabilize, though at depressed levels.
    The 30-year fixed mortgage rate declined to an average 6.15%
last week, the lowest level since mid-September, according to
data from mortgage finance agency Freddie Mac. 
    The rate was down from 6.33% in the prior week and has
dropped from an average of 7.08% early in the fourth quarter,
which was the highest since 2002. But it remains well above the
3.56% average during the same period last year.
    The median new house price in December was $442,100, a 7.8%
increase from a year ago. There were 461,000 new homes on the
market at the end of last month, unchanged from November. Houses
under construction accounted for 63.1% of the inventory, with
homes yet to be built making up 21.5%.
    Completed houses accounted for 15.4% of the inventory, well
below a long-term average of 27%. At December's sales pace it
would take 9.0 months to clear the supply of houses on the
market, down from 9.2 months in November.
 (Reporting by Lucia Mutikani; Editing by Andrea Ricci)
 ((Lucia.Mutikani@thomsonreuters.com))