New U.S. single-family home sales fell in December although the previous month’s reading was revised to show the fastest sales pace in over two years, a sign the country’s housing recovery remains on track.
The Commerce Department said on Friday sales dropped 7.3 per cent last month to a seasonally adjusted 369,000-unit annual rate. That was below analysts’ forecasts of a 385,000-unit annual pace.
However, government data for new home sales are subject to substantial revisions. Indeed, the Commerce Department raised its estimate for sales in November by 22,000 to a 398,000-unit rate, making the pace of sales in November the fastest since April 2010.
Also adding some lustre to the report, the median price for a new home rose to $248,900 (U.S.) in December from $245,600 in November, according to figures that are not adjusted for seasonal swings.
“I’d say this is a relatively strong housing number,” said Omer Esiner, an analyst at Commonwealth Foreign Exchange in Washington.
The housing sector has been a point of strength in the economy over the last year, and is expected to help offset the economic damage from tax hikes enacted this year.
Financial markets appeared to brush of the data. U.S. stocks rose, buoyed by sturdy corporate earnings from Procter & Gamble and Honeywell, with the S&P 500 poised for its longest winning streak in more than eight years.
Economists think home building added to economic growth last year for the first time since 2005. Friday’s report showed 367,000 new homes were sold last year, the most since 2009.
Still, that number remains about a third of the record number sold in 2005, before a housing collapse helped trigger the 2007-09 recession.
In December, sales cooled in three of the four major regions tracked by the government, climbing only in the Midwest.
“This should prove to be a temporary blip as the U.S. housing market continues its gradual recovery,” Andrew Grantham, an economist at CIBC World Markets in Toronto, said of December’s sales decline.