U.S. Home Sales Disappoint, Drop More than Forecast in January
New Home Sales in the United States fell short of economists’ expectations for January, falling by 12.6 percent from December. The median estimate of 70 economists surveyed by Bloomberg called for a decline to 305,000. Estimates ranged from 275,000 to 340,000. After the release, the Commerce Department revised December new home sales down to 325,000 from the previously reported 329,000 rate.The gains last month represent the strongest annual pace since April. At an annual pace of 284,000 in January, it appears that falling demand in the southern and western parts of the United States led the decline; demand fell by 37.0 percent in the west, and 13.0 percent in the south. The declines did not come entirely unexpected, however: economists figured that poor weather conditions for much of the past two months, coupled with a California tax credit expiry, would hurt sales.
For the near-term, house prices are expected to remain depressed, as foreclosures continue to depress homes’ values. Existing home sales could rebound, some economists have speculated, as the sustained period of lower prices has made previously owned properties more attractive than new homes. Accordingly, new home sales are forecasted to lag the recovery of the broader housing market.
Written by Christopher Vecchio, DailyFX Research.
To contact the author of this report, please send inquiries to: email@example.com
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.