Sales of newly built homes in the US hit their highest level in eight months in November, in contrast with other reports that have signalled the housing market is cooling.
New home sales surged 16.9 per cent in November from the previous month to an annualised pace of 657,000 units, the US Census Bureau said on Thursday. That eclipsed expectations for a 2.9 per cent increase to 560,000 and followed an 8.3 per cent drop in October.
The level of new home sales was the highest since March, however the increase marked the biggest jump since 1992. It is worth noting that these data are noisy and often subject to later revision.
The report was among those delayed by the partial government shutdown that ended on Friday and was the longest in history, lasting 35 days.
Homebuilder ETFs climbed following the release of the data, with the iShares US home construction ETF up 2.4 per cent and the SPDR S&P homebuilders ETF up 1.5 per cent.
The upbeat November figures nonetheless offered some positive light on the housing market that is considered to have lost steam by the end of the year amid rising mortgage rates and home prices that left many would-be buyers on the sidelines.
Pending home sales fell for the third straight month in December, data on Wednesday showed, hitting their lowest level since April 2014. Sales of previously owned homes, which account for the lion’s share of the market, fell to their lowest level since November 2015 at the end of last year.
However homebuilders are hopeful that a more patient approach by the Federal Reserve, which this week put further interest rate rises on hold, would help support sales this year.
Despite the month-on-month increase, Thursday’s report showed new home sales were down 7.7 per cent from a year ago, even as median home prices fell nearly 12 per cent from a year ago to $302,400.