WASHINGTON: Sales of new US single-family homes fell unexpectedly in December, likely held down by a shortage of more affordable homes, but lower mortgage rates supported the overall housing market.
It was the third straight monthly decline in sales. November's sales pace was revised down to 697,000 units from the previously reported 719,000. September and October sales were also marked down. The PHLX housing index fell, tracking a broadly weaker US stock market as investors worried about the economic fallout of the fast-spreading coronavirus outbreak in China that has prompted the country to extend the Lunar New Year holidays and businesses to close some operations. The dollar was steady against a basket of currencies. US Treasury prices rallied.New home sales are drawn from permits and tend to be volatile on a month-to-month basis. Sales jumped 23.0 per cent from a year ago.
"Household formation trends are running ahead of new housing construction and this will buoy the housing market in 2020," said Conrad DeQuadros, senior economic advisor at Brean Capital in New York. The Atlanta Fed is forecasting GDP to rise at a 1.8 per cent annualised rate in the fourth quarter. The economy grew at a 2.1 per cent rate in the July-September period. The government will publish its snapshot of fourth-quarter GDP on Thursday.
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