US New Home Sales in November surprised lower with a fall of 11.3%, following a revised down 1.8% gain in October. Economists surveyed by Bloomberg had expected a increase of 1.7%. Tracking fell to 355,000 homes sold annually, from 400,000. Looking deeper into the release, sales fell sharply in the south to 179K from 227K, while the west and northeast also noted weakness. Elsewhere, Midwest sales proved resilient with an increase to 68K from 56K. A worrying sign perhaps, supply of homes climbed to 7.9 months, the highest since June. At the same time, investors are likely to view an increase in prices with optimism. As total supply continues to dwindle, median price increased to $217,400 from $209,400. Average price climbed to $280,300 from $255,900, although this remains below the September high of $289,200. Overall, the figure now stands at a seven-month low, but this may not be of large significance as existing home sales more than countered this decline. Existing Home Sales for November reported yesterday an increase of 7.4% to mark three consecutive months of strong gains.
Reaction to the news sent markets in the US initially lower, now hovering in mixed territory at yesterday's close. Dollar weakness emerged this morning and has continued strongly to benefit commodities. Crude climbed more than $1 per barrel in the past hour to $75.69, while gold returned to positive territory with a minor gain.
New Home Sales Monthly Chart
Written by Roman Kadinsky, DailyFX Research
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