US new home sales highest in two years
New home sales in the US last month rose to the highest level for more than two years in a further sign the housing market has turned a corner.
October 25, 2012 / 10:01 IST
New home sales in the US last month rose to the highest level for more than two years in a further sign the housing market has turned a corner.
Sales of single-family homes were up 5.7 per cent to 389,000 in September from August, the commerce department said on Wednesday. The August figure was revised down to 368,000. Sales were 27.1 per cent above their September 2011 level.The latest figure was the highest seasonally adjusted annual rate since April 2010, when buyers were flocking to the market to take advantage of a tax credit. Economists had forecast a 385,000 level in September.More News From Financial Times
US new home sales at highest in two years US home sales near two-year peak New home sales match two-year high Inventories hit US existing home sales US existing home sales at two-year high "While the level of sales is still quite low, the trend is clearly upward," said Jim O'Sullivan, chief US economist at High Frequency Economics.The report was the latest in a string of upbeat indicators of a strengthening recovery in residential real estate, the sector of the economy at the heart of the financial crisis that has been mired by falling values and a glut of foreclosures over the past six years.Last week brought news that construction of new homes jumped 15 per cent in September. However, much of the strength was in multi-family units, which include apartment blocks, suggesting that investment in rental properties may be outpacing individual buyers.Record-low mortgage rates and signs that prices have finally bottomed have encouraged some buyers back into the market - though purchases are still being hindered by tight credit conditions and strict lending standards.The median price of a single-family home was to USD 242,400 last month, lower than August but an 11.7 per cent increase from a year ago, the US commerce department report said. Median prices for existing homes posted a similar increase last month to USD 183,900, the National Association of Realtors said last week.The inventory of new homes for sale edged up 1.4 per cent but at 145,000, it is still near record lows."This further supports price gains for builders," said Jonathan Basile, director of economics at Credit Suisse.New home sales rose in three of the four US regions, led by a 16.8 per cent increase in the south and a 16.7 per cent rise in the northeast. The midwest saw a 37.3 per cent decline, however. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
