New home sales measure the number of newly constructed homes with a committed sale during the month. The level of new home sales indicates housing market trends and, in turn, economic momentum and consumer purchases of furniture and appliances. Why Investors Care
| Released on 1/26/07 For Dec 2006 | ||||||||||||
| ||||||||||||
Highlights
There's more good news from the housing sector. New home sales rose 4.8 percent in December to a higher-than-expected annual rate of 1.120 million. Supply, as it did in yesterday's existing homes sales report, fell, down to 5.9 months from 6.1 months in November. And prices, as they also did in the existing home sales report, were firm, at a median $235,000 for a small month-to-month gain and a mild 1.5 percent year-on-year decline. Median price for an existing home is $222,000, unchanged year-on-year.
Excessive weakness in the housing sector is, or at least has been, one of the biggest risks to the economy. Though housing supply is still high and indications of strengthening sales are still tentative, more and more signs are pointing to stabilization in the sector in what would be a big success for the Federal Reserve and its efforts to guide the economy on a soft landing. Treasuries eased and the dollar firmed in initial reaction to the data.
New home sales rose 3.4 percent in November to an annual rate of 1.047 million units. As with existing home sales, supply did ease, falling to 6.3 months vs. 6.7 months in October. A further decline in supply would be good for new construction but even holding steady would likely be seen as a positive given the significant decline in November.
New home sales Consensus Forecast for December 06: 1.05 million-unit rate
Range: 1.02 million to 1.10 million-unit rate
![[Chart]](chart.gif)
|
There is no question that lower interest rates boost home sales. Other factors also impact housing decisisions, such as employment and income growth, and wealth stemming from stock market gains. |
| 2007 Release Schedule | ||||||||||||||||||||||||||
|
powered by
![[Econoday]](../../../../../../../../../images/logo.gif){kind=logo}